Utilization declines but signals rebound

Hurriyet Daily News with wires

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The capacity utilization rate rose 2.1 percentage points in April compared to the previous month, according to the results of the Tendency in the Manufacturing Industry April-2009 released yesterday by the Turkish Statistical Institute, or TÜIK. Manufacturers used 66.8 percent of their capacity last month compared with 64.7 percent in March. The rate of capacity utilization, weighted by production value, was 81.7 percent in April 2008.

The capacity utilization increased in April for the second consecutive month after the government cut taxes on vehicles and white goods to stimulate consumer demand, Bloomberg said. Turkish companies were expected to use 65.6 percent of their capacity in April, according to a Bloomberg survey of six analysts.

In capacity utilization, public sector’s rate was 64.8 percent while private sector had a rate of 66.8 percent in April, reported Anatolia News Agency. In the same month of last year, capacity utilization rate was 80.4 percent and 91.2 percent in private sector and public sector respectively. The survey is based on the primarily provisional results of 4,936 manufacturing industrial enterprises.

Weakest demand from offices

Office and accounting data processing machinery manufacture had the lowest capacity utilization rate of 45 percent among the fields in manufacturing industry last month. It was followed by cooking coal and refined petroleum products manufacture with 58.2 percent and vehicles and bodies manufacture with 58.4 percent.
In April, capacity utilization rate was 67.7 percent in food products and beverages manufacture, 75.4 percent in tobacco products manufacture, 70.7 percent in textile products manufacture, 67.1 percent in machinery and equipments manufacture, 83.7 percent in radio, TV communication devices, 80.7 percent in medical, optical sensitive device manufacture and 66.6 percent in furniture manufacture.

Shortage of demand constituted the first reason for not working in full capacity last month.

Shortage of demand in domestic markets was 55.4 percent, while it was 31.4 percent in foreign market. Financial problems played a role with 3.5 percent while shortage of raw domestic materials had a share of 3.1 percent, shortage of raw imported materials 1.4 percent and labor problems 1.3 percent.

Production quantity increased by 8.5 percent in April, and is expected to rise by 9 percent in May. Sales quantity, which climbed 10.9 percent in April, is forecast to rise by 4.8 percent this month. Sales prices increased by 0.9 percent in April.