Construction Materials Industry Composite Index Results Announced

Türkiye İMSAD announces July 2023 results of Construction Materials Industry Composite Index. In July, the Activity Index rose to 141 points with an increase of 3.2 points thanks to positive seasonal contribution, while the Confidence Index declined marginally to 33.94 points. According to the report, July was the month when the initial effects of policy changes in the economy were felt on the industry index. In July, activities gained momentum as restrictive factors and uncertainties were removed.

Construction materials industry index freed from restrictive factors

According to the Türkiye İMSAD report; the Construction Materials Industry Composite Index in July broke free from restrictive factors such as the earthquake disaster experienced in the first half of the year, elections, reduced number of working days and economic uncertainties. In July, when changes in economic policies and developments in foreign markets emerged as key determining factors, the Construction Materials Industry Composite Index rose to 71.54 points with an increase of 0.44 points compared to the previous month. The report emphasized that the performance of the Composite Index in the second half of the year would be determined largely by new economic policies and conditions in foreign markets. It was noted that tightening and slowdown could emerge as the main theme.  

Activity Index reaches all-time high at 141 points

According to the report, the elimination of many restrictive factors in July and seasonality had a positive effect on activities. As a result of all these developments, high rates of growth were achieved in sub-activity groups in July. Within this framework, the Activity Index increased by 3.2 points compared to the previous month, reaching 141 points. With this result, the Activity Index reached its all-time high since the index started being measured, also reached in June 2022. Domestic sales in the construction materials sector also increased significantly in July compared to the previous month. The normalization of the number of working days, reduction of uncertainties to a minimum and seasonality reflected positively on sales, while exports also showed an increase in July.

Confidence Index declined domestically, rose in export markets

According to the Türkiye İMSAD report, which is closely monitored by economic circles; despite improvements in business conditions in July, reduction in uncertainties and rapid increase in activities, the Confidence Index showed a decline. The confidence level decreased by 0.29 points in July compared to the previous month, falling to 33.94 points. Thus, the Confidence Index remained fragile and weak in July. While confidence in domestic markets decreased marginally in June, confidence in export markets rose significantly.   According to the report, the goal of returning economic policies to a rational basis was initially received positively. However, with initial implementations, significant increases were experienced in exchange rates, costs and interest rates in July. Despite the momentum in activities in July, it was estimated that the tightening measures of the new economic policies would slow down businesses. It was noted that the effects of policies on confidence would be seen more clearly in the coming months.

Expectations Index showed stagnant response in July

According to the report, another area showing limited decline in July was the Expectations Index. Return to a rational basis in the economy and its possible effects emerged as the most important factors affecting expectations. The report noted that significant increases were experienced in exchange rates, interest rates, wages, taxes and other costs at the initial stage with new economic policies. Within this framework, the Expectations Index declined by 0.1 points in July compared to the previous month. Thus, the Expectations Index showed an initially stagnant response to changes in economic policies in July. The distribution of inflation fighting over time and setting high inflation targets for 2 years limited expectations. Accordingly, a limited decline was realized in domestic orders received for the coming three months.