Capacity utilization, business confidence decline in May

ANKARA

The capacity utilization rate (CUR) in the key manufacturing sector fell, while business morale deteriorated in May, according to official data released on May 27.

The unadjusted CUR declined from 76.7 percent in April to 76.3 percent in May, the numbers of the Central Bank showed.

On a seasonally adjusted basis, the capacity usage was down 0.4 points to 76.6 percent.

In the durable consumer goods manufacturing sector, companies worked at 74.3 percent capacity in May, which compared unfavorably with the 75.1 percent CUR in the previous month.

The capacity utilization in the non-durable consumer goods sector, however, inched up from 72.6 percent to 73.5 percent.

In the consumer goods industry, companies’ capacity usage was 73.6 percent, rising from the previous month’s 73 percent.

Food companies used 72.5 percent of their capacities in May, a slight decline from the CUR of 72.7 percent in April.

In the capital goods manufacturing sector, businesses used more of their capacity; 76.6 percent in May versus 75.9 percent in the previous month. However, the capacity utilization of intermediate goods manufacturing companies fell from 77 percent to 76.1 percent.

 Business confidence falls

The Central Bank also reported on May 27 that the business confidence index deteriorated for the first time since December 2023.

The real sector confidence index retreated from 106.1 in April to 105.4 in May.

Any figure above the 100-mark indicated optimism among businesses.

The sub-index of current orders was down 1 percent month-on-month to 86.7, while the gauge of the amount of current stocks of finished goods plunged 2.1 percent from April to 92.9.

The index of production volume in the next three months fell 1.8 percent monthly, but the index of total employment in the next three months inched up 0.5 percent month-on-month.

The index of total orders in the past three months declined 2.5 percent.

The index measuring companies’ assessment of the general business situation plunged 2.3 percent.

The Turkish Statistics Institute (TÜİK) separately reported on May 23 that the confidence in the retail and construction sectors fell but was unchanged in the services sector.

Morale in the retail sector fell 3.3 percent, owing mostly to the decline in the index of business volume and sales in the past three months.

In the construction sector, the confidence index was down 0.3 percent in May after remaining unchanged in the previous month.