Industrialists concerned about economic outlook: Lowest confidence index in four years

Assessments by firms operating in the industrial sector regarding the economic outlook continue to trend negatively. According to data released by the Central Bank, industrialist sentiment regarding the general outlook within the scope of the Real Sector Confidence Index pointed to the most pessimistic picture in four years in April.

Responses to the question regularly posed to industrialists each month, “What is your opinion regarding the general outlook in your industry compared to a month ago?”, reveal the challenging process the sector is currently facing. In April, only 4 percent of industrialists stated that the outlook was “better,” while 71.9 percent answered “the same,” and 24.1 percent expressed the view that it was “worse.” Consequently, the difference between optimism and pessimism rates fell to negative 20.1 points, and the general outlook index declined to 79.9.

This result shows that for the first time since April 2020, when the effects of the pandemic were felt, optimism rates have fallen to such low levels. During the pandemic period, the rate of those saying the “outlook is good” hit a historic low of 3.2 percent. Although the economy has experienced various fluctuations in the six years since that period, the current picture indicates that pessimism is on the rise again.

Along with the pessimism of industrialists, general economic confidence is also showing a downward trend. In April, the seasonally adjusted Real Sector Confidence Index announced by the Central Bank fell to 98.6, marking its lowest level in the last year.

Another notable topic in the April expectation surveys was expectations regarding domestic market sales prices. While 50.3 percent of industrialists said they expect prices to increase in the next three months, 46.5 percent stated that prices would remain stable, and only 3.2 percent reported that they would decrease. The difference between those saying prices will increase and those stating they will decrease reached 47.1 points, the highest level in recent years.

Industry representatives point out that the problems currently affecting the sector have deepened further due to developments such as the Russia-Ukraine war. The uncertainty regarding the duration of the war and the ongoing instability in the region are increasing the confidence problem in production and investment decisions.

Leading figures in the sector state that steps must be taken to improve the economic outlook in the medium and long term, while emphasizing that an optimistic picture is not expected in the short term due to rising costs and low domestic demand.

These results, included in the assessment shared on the Ekonomim website by Alaattin Aktaş, indicate that the difficulties faced by the Turkish industrial sector will remain on the agenda in the coming months.