Workers pass Ford Cargo trucks at the end of the production line after assembly at the Ford Otosan production plant, the joint venture between Ford Motor’s Ford Otomotiv Sanayi and Koc Holding, in Eskisehir, Turkey (file). The slump in confidence among Turkish manufacturers is the latest sign of Turkey’s cooling economy.

Reuters
Istanbul


Business confidence among Turkish manufacturers fell to its lowest in nearly three years in September, dropping to 99.1 points from 103.7 points a month earlier, central bank data showed yesterday.
The data is the latest sign of Turkey’s cooling economy, which is being weighed down by political uncertainty after years of strong growth.
It is the first time since December 2012 that the confidence of Turkish manufacturers has dipped below 100. Scores in excess of that mark denote optimism, whilst those below indicate pessimism.
Manufacturing makes up nearly one third of the Turkish economy.
All sub-indices of the Real Sector Confidence index (RSC) other than current stock levels showed a sharp drop in September, according to Muammer Komurcuoglu, economist at IS Investment.
General business situation, export orders and volume of output for the next quarter, as well as fixed investment expenditures were the worst performers, Komurcuolgu added.
“All in all, deterioration is deepening in the RSC, which supports the view that economic activity will lose momentum in the second half of the year due to post election uncertainty.”
The ruling AK Party lost its majority for the first time in 13 years in June parliamentary elections, and subsequent failed coalition talks have prompted a snap poll on November 1.
The collapse of a ceasefire with Kurdish militants in July and mounting security concerns posed by possible spillover from conflict in neighbouring Iraq and Syria have deepened unease.
GDP growth is expected to fall far below the government’s 5% annual target again this year, having achieved only 2.9% in 2014. Consumer confidence also plummeted this month, hitting a 6 1/2 year low.