Construction and Retail Trade on the Rise as Confidence in Services Sector Declines
Turkish Statistical Institute (TurkStat) shared sectoral confidence index data for November with the public. According to the data, there was a loss of confidence in the services sector, while confidence in construction and retail trade sectors increased. These developments revealed remarkable differences in sectoral confidence indices.
Decline in Service Sector
According to seasonally adjusted data released by TURKSTAT, service sector confidence index decreased by 2.9 percent to 111 in November. While the business situation assessment for the last three months decreased by 3.4 percent, demand for services fell by 3.8 percent. Demand expectations for the next period also declined by 1.4 percent, revealing the negative trend in the sector.
This decline in the service sector is attributed to the decline in customer demand and uncertainty in the markets. According to economists, it is critical to regain customer confidence and take measures to increase demand for the sector to recover.
Retail Trade Sector Gained Confidence
In November, retail trade confidence index increased by 0.9 percent to 111.7. The 2.5 percent increase in business volume and sales in the last three months strengthened the recovery signals in the sector. Expectations for the next three months also increased by 0.9 percent, giving hope to sector representatives.
However, there was a 1.2 percent decrease in the current inventory level. Experts state that the decline in inventories is due to the increasing sales volume as the year comes to an end and that the retail sector displayed a strong performance in the last quarter of the year.
Signals of Recovery in Construction Sector
Construction sector showed signs of recovery in November. The confidence index rose by 1.7 percent to 87.8. The current level of registered orders received increased by 1.3 percent, while expectations for the total number of employees increased by 2.1 percent.
This increase in the construction sector is attributed to urban transformation projects and public investments. However, sector representatives emphasize that the confidence index is still below 100 and that more support is needed for long-term improvement.
Differences between Sectors
TurkStat’s data for November clearly reveals the differences between the service sector and the construction and retail trade sectors. While the decline in the services sector pulls down the average of sectoral confidence indices, the increase in the construction and retail trade sectors signals a recovery in the economy.
Experts state that these differences in sectoral confidence indices show that the Turkish economy has different dynamics on a sectoral basis in the post-pandemic period. This increases the importance of sector-specific policy recommendations.
