COVID-19 ravages Turkey’s vital clothing, textile industry (Al Monitor, May 20, 2020)
Turkey’s clothing and textile industry — the most crucial branch of the country’s economy in terms…
Mustafa SÖNMEZ – Hürriyet Daily News / February /22 /2014
The declining value of the lira in combination with political concerns erupted after the Dec 17 graft operation have adversely affected consumer confidence for the future, two different consumer confidence indicator surveys have revealed.
Expectation surveys, which help measure the expectations of consumers about the future, their confidence, and their propensity to consume, reveal that the man on the street has started to withdraw into himself. He is consuming less and acting more cautiously, particularly since May 2013, when the Turkish Lira started losing value. In May 2013, the U.S. Federal Reserve’s decision to tighten monetary policies caused a loss of value in the local currency. As such, the declining value of the lira has negatively affected consumer confidence for the future, and this crisis of confidence apparently deepened after the Dec. 17 graft operations.
Graft probe impact
The preliminary findings of the expectation survey for the month of February were broadcast on the economy channel CNBC-e. According to this, the preliminary consumer confidence index for February declined by 13 percent from January and has hit its lowest level since November 2008. The propensity to consume index, on the other hand, has dropped by one third, or 33 percent. With the increase in the deterioration of the consumer’s personal financial expectation, the Consumer Expectation Index in February also dropped 5.5 percent compared to January.
Although it recovered in the months of October and November through the postponement of the Fed’s decisions and the stopping of the lira’s loss of value, the drop in consumer confidence that started in May 2013 looks like it has increased rapidly since the Dec. 17 operations. The Consumer Confidence Index dropped 42 percent from May 2013 to February 2014, and it is noteworthy that 75 percent of this has occurred since December.
Meanwhile, the Consumer Confidence Index, which is calculated based upon the outcome of the Consumer Tendency Survey, conducted with the cooperation of Turkish Statistical Institute (TÜİK) and the Central Bank, had a 3.5 percent fall in January 2014 compared to the previous month. The index, which was 75 in December, fell to 72.4 in January.
According to TÜİK’s confidence survey, the financial situation expectation index of households for the next 12 months dropped 1.2 percent in January compared to the previous month.
In real sector
In addition, the Real Sector Confidence survey conducted by TÜİK and the Central Bank demonstrated a drop of 2.3 percent from May 2013 to January 2014. The deterioration in the expectations of the real sector peaked, especially in January 2014, at 6.4 percent. The expectations were also affected by the Dec. 17 operations and further deteriorated through the rapid fall in the value of the lira and the increase in interest rates as a counter measure to this.
When the real sector is viewed as of sub-branches, it is seen that the deterioration in the service and retail sectors went up to 15 percent after May 2013. On the other hand, the disruption in the construction sector has remained at around 5 percent in the same period.
Another indicator that markets observe about expectations is the Purchasing Managers’ Index (PMI), which HSBC conducts in several countries. For Turkey, the PMI did not change much in the May-August 2013 period. It showed progress in September and increased by around 6 percent compared to May. The PMI index was positive in the following months and showed a significant drop in January 2014, declining 22.4 percent compared to September.
It can be estimated that the expectation surveys have gone down further in the month of February, both for consumers and entrepreneurs. The hints of this have been revealed by the CNBC-e February preliminaries and the index showed a drop of 5.5 percent compared to January.
We can say a significant decline will be seen compared to January in the TÜİK-Central Bank February survey results, which are expected to be announced at the end of the month.
The Monthly Consumer Tendency Survey aims to measure present situation assessments and future period expectations of consumers on their personal financial standing and the general economic course, and to determine consumers’ expenditures and saving tendencies for the near future.
The data regarding the assessments, expectations and tendencies was collected and published by Turkey’s Statistical Institute (TÜİK) and is presented according to the following subcategories, respectively:
Personal financial standing: Consumers’ assessments on the financial situation of their household at present, compared to the last 12 months, financial situation expectation of their household over the next 12 months, statements on current financial situation of their household and the borrowing money probability over the next three months.
General economic situation: Consumers’ assessments on the current general economic situation in Turkey compared to past 12 months, general economic situation expectation in Turkey over the next 12 months, number of people unemployed expectation over the next 12 months, buying time condition of durable goods in the present period, saving time condition in the present period, assessment on consumer prices change rate over the last 12 months, expectation for consumer prices change rate over the next 12 months, expectation for wages change rate over the next 12 months.
Expenditure and saving tendencies: Consumers’ assessments on spending money on semi-durable goods over the next three months, spending money on durable goods over the next 12 months, the probability of buying a car over the next 12 months, the probability of buying or building a home over the next 12 months, the probability of spending money on home improvements or renovations over the next 12 months and the saving probability over the next 12 months.