Turkey: Business confidence edges down in April
April 24, 2018
Business sentiment deteriorated slightly in April, as indicated by the Real Sector Confidence Index published by the Central Bank, which inched down to 111.2 from 111.9 in March. Nonetheless, the index remained above the 100-point threshold that separates optimism from pessimism among firms, where it has been for just over a year.
Most of the components of the index recorded deteriorations from the previous month in April, with companies’ appraisal of work orders driving the decline. Firms were less optimistic about current new orders and orders over the next three months. Companies also had a more pessimistic outlook on future export orders than in March. In addition, their assessment of fixed investment spending and the general business situation worsened.
On a more positive note, businesses were more optimistic about the labor market, with firms’ view on employment over the next three months improving. Meanwhile, companies’ perspective on current stocks of products was steady in April.
Regarding prices, the differential between firms that expected higher input prices over the next three months and those that expected lower input prices further widened to a four-month high in April, pointing to increasing price pressures. That said, their view on selling prices in the next three months was more positive in April, suggesting firms should be able to pass expenses to consumers.
Turkey Fixed Investment Forecast
FocusEconomics Consensus Forecast panelists see fixed investment expanding 5.1% in 2018, which is up 0.6 percentage points from last month’s estimate. In 2019, panelists expect fixed investment to grow 4.2%.
Author: Lindsey Ice, Economist