Dr. Fulya Gurbuz: Leading indicators for January show retail sales supporting  economy

According to seasonally adjusted (MA) CBRT and TURKSTAT data, in January;

. In sectoral confidence indices; confidence in the services sector decreased by 1.7% monthly and in the retail trade sector by 1.0% monthly, while in the construction sector it increased by 0.6% monthly.

. Capacity Utilization Ratio (CUR-MA) decreased by 0.6 percentage points monthly to 75.8%. The decrease in CUR in all product groups compared to the previous month suggests  downward pressure on industrial production. In the months ahead, the increase or decrease in input stocks will reveal the degree of this pressure.

. Real Sector Confidence Index (RKGE-MA) increased by 1.8 points monthly to 103.4. Values ​​above 100 in the index indicate optimism in the sector.


There are optimistic signs in sectoral and real sector confidence indices…


According to RKGE data, existing orders have continued to improve, albeit slowly, for the last 4 months, which appeared to have been somewhat covered by running down inventories of finished goods. For the next 3 months, participants foresee improvement in export orders, a flat course in production, and a slight decrease in employment.

The sub-indices of “business volume (sales) in the last 3 months” in the Retail Trade Sector Confidence Index, “orders in the last 3 months” in the RKGE, and “business conditions in the last 3 months” in the Service Sector increased in January.


In addition to the improvements in these categories, positive expectations for demand and business volume in the “next 3 months” led to increased optimism regarding investment expenditures. As a matter of fact, in January, the investment expenditures sub-index in the manufacturing sector increased compared to the previous month.

Finally, we can add that  “optimism about  production volume in the next 3 months” in the manufacturing sector is expected to remain relatively flat, while the increase in the expectation of the “order  to be placed with  suppliers in the next 3 months” in the retail trade sector appears to have the objective of restoring inventories.


Data suggests  improving retail sales…

In the period of December 2022-January 2023, the improvement in orders on a monthly basis will support future retail sales. In January, we can say that the improvement in investment expenditures may support industrial production, albeit partially.


Follow our  English language YouTube videos  @ REAL TURKEY:   https://www.youtube.com/channel/UCKpFJB4GFiNkhmpVZQ_d9Rg

And content at Twitter: @AtillaEng

Facebook:  Real Turkey Channel:   https://www.facebook.com/realturkeychannel/



Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and www.paraanaliz.com and has contributed to the financial daily Referans and the liberal daily Radikal.