The figures, released by the Turkish Statistics Institute (TurkStat) on Monday, revealed that the capacity utilization of Turkey's manufacturing sector weighted by production value moved upwards after experiencing moderate drops the previous two months. In August the capacity utilization rate had declined 2.6 percentage points compared to the preceding month.
The TurkStat report cited the shortage of demand in both domestic and foreign markets as the principal factors preventing the manufacturing sector from functioning at full capacity.
According to TurkStat, 53 percent of companies surveyed pointed to a shortage in domestic demand as the primary reason for not operating at full capacity, while 31.2 percent cited a lack of demand from foreign markets. Some 3.6 percent attributed the shortfall in capacity utilization to financial problems, and 3.9 percent blamed a shortage of domestic raw materials. Some 1.8 percent of respondents pointed to a shortage in raw imported materials and 1.1 percent to labor problems as the most significant factor preventing them from operating at full capacity.
Production quantity decreased by 5.5 percent in September compared to the previous month, but manufacturers predict that it will increase by 2.5 percent in October. During the same period, the amount of goods sold increased by 7.3 percent, with those surveyed predicting that the number will increase by 1.6 percent in October. Sales prices also increased by 0.2 percent in September compared to the previous month. The prices of raw materials decreased by 0.1 percent in September, but next month they are expected to increase by 0.8 percent.
These results are the most positive seen in the last 10 months.
The contraction in Turkey's capacity utilization gained momentum in December 2008 when the rate dropped to 64.7 percent from 72.9 percent the previous month and then to 63.8 percent in both January and February. March and April saw nascent recovery as the figure rose to 64.7 percent and 66.8 percent, respectively. The recovery continued in the following three months with the rate rising to 70.4, 72.7 and 72.3 in May, June and July, respectively. The optimistic outlook was welcomed by Turkish business circles, increasing hope for a sustainable recovery in capacity utilization, a gauge widely used to assess the health of the industrial sector. The 2.6 percent drop in August, however, suggested that the crisis had not yet eased as it continued to have adverse impacts on the economy.
