Business confidence in Turkey plummets

ISTANBUL - Hürriyet Daily News

The proportion of Turkish companies reporting revenue increased dropped from 69 percent in April to 64 percent, says the Regus report. Half of the Regus’ respondents have said they are happy with gov’t support to businesses.

A sharp decline in business confidence in many rapidly growing economies is raising a warning flag that global business may face continued volatility for some months to come. In Turkey, confidence levels have fallen sharply, dropping 22 points in the Regus Business Confidence Index (from 138 to 116) since April 2012.

Regus Turkey Country Manager Erim Denel said: “We were particularly struck by the lack of any improvement amongst entrepreneurs and small businesses.”

Inflexible leases

“In order to improve their cash situation, respondents identified affordable and flexible business services – especially for overheads such as workspace, administrative support and sales/marketing. 45 percent of respondents, for instance, reported that one of the major burdens during the downturn has been inflexible property leases. Flexible services allow businesses to be more agile and free-up cash for investment without relying on credit at a time when it is so difficult to secure,” he continued.

The proportion of Turkish companies reporting revenue increases dropped from 69 percent in April 2012 to 64 percent, however, profits rose from 50 percent to 59 percent, said the report.

Just over half, roughly 53 percent of Turkish respondents reported that they were satisfied with their government’s support strategies for business.

Meanwhile, sector confidence indices decreased in October compared to the previous month. According to a monthly survey conducted by the Turkish Statistical Institute (TÜİK), service sector confidence index decreased 2.1 percent, retail trade sector confidence index went down 8.8 percent, and construction sector confidence index decreased 7.1 percent in October compared to September.

Service sector confidence index recorded an overall value of 103, retail trade sector confidence index recorded a value of 99.2, and construction sector confidence index recorded a value of 79 in October.
Sector confidence indices take a value between 0-200. A value higher than 100 indicates optimism in the sector.