In June 2020, seasonally and calendar adjusted SAMEKS Compound Index increased by 1.0 points compared to the previous month and reached 44.1.
While the increase in the industry index was stronger with 7.0 points to 51.6 mom in June, the service sector index remained stagnant at 42.4 level increased by 0.5 points.
While there is a rapid increase in new orders in the industry sector and corresponding input purchases, the stagnation of business volume for the service sector continues in this period. As a result of these developments, seasonally and calendar adjusted SAMEKS Compound Index, which increased by 1.0 points compared to the previous month, continued its recovery trend that started in May, however, it remained below 50 reference values, indicating that the stagnation in the real sector has not yet been left behind.
The rebound in the Turkish manufacturing with a return to growth territory is both confirmed with the Istanbul Chamber of Industry Turkey Manufacturing PMI index with June’s reading of 53.9. The increase in the SAMEKS Industrial Sector Index to 51.6; indicates that the outlook for the manufacturing industry has started to turn into positive. In parallel, a strong increase was observed in the real sector confidence index in the same period.
Yet, the stagnant services sector activities carries the potential of slowing the recovery staged in the manufacturing side. Given that Turkey’s tourism sector is hit the most from the pandemic, the June manufacturing performance can only cap the expected catastrophic GDP contraction expected for 2Q20. Return to positive growth in 3Q20 should not be expected although July-August performances will of course be critical.
Industry Sector SAMEKS Index
Seasonally and calendar adjusted SAMEKS Industry Sector Index increased by 7.0 points in June 2020, to 51.6, compared to the previous month. New orders increased by 9.8 points compared to the previous month to 52.8, which played a determining role in the acceleration of the industry sector. Due to the acceleration observed in new orders, input purchases increased by 9.0 points compared to the previous month and reached 57.5. Depending on these developments, the production sub-index increased by 8.5 points compared to the previous month and reached 49.2. While no change was observed in the final goods inventory of the sector compared to the previous month, the delivery time sub-index of the suppliers remained at the level of 46.7 and maintained its negative outlook. In this period, the labor force demands of firms operating in the industry sector increased rapidly and the employment sub-index increased by 13.5 points compared to the previous month to 58.1. As a result of these developments, the SAMEKS Industrial Sector Index, which rose to 51.6, was once again over the 50 reference value after a 3-months break showing that the recovery process in the industrial sector has accelerated.
Service Industry SAMEKS Index
Seasonally and calendar adjusted SAMEKS Service Sector Index increased by 0.5 points compared to the previous month and reached 42.4 in June 2020. In this period, the input purchases sub-index increased by 3.4 points compared to the previous month and rose to 50.1, playing a determining role in the increase observed in the service sector. Despite the increase by 0.7 points compared to the previous month, the weak outlook in the business volume sub-index, which remained below the reference value with 38.4 points, resulted in an increase of 5.6 points in the final goods stock. The employment sub-index for the service sector, on the other hand, increased by 2.5 points compared to the previous month to 42.8 and maintained its negative outlook in June. Thus, the SAMEKS Service Sector Index, which displayed a weak recovery increasing by 0.5 points mom reflected the ongoing stagnation in the sector by maintaining its course below 50 reference values.