Construction Materials Industry Composite Index Results Announced

Turkey's Construction Materials Industry Composite Index results for January 2024 released by İMSAD. The Composite Index declined by 0.23 points in January compared to the previous month, falling to 71.12 points. The Activity Index in January 2024 stood 9.5 points above the same period of the previous year, but fell 1.6 points month-on-month to 143.9 points. The Confidence Index declined by 0.07 points from the previous month to 32.88 level, remaining weak and fragile. The Expectations Index increased by 0.34 points from the previous month, beginning the year at 57.94 points. According to the report, the Composite Index entered the new year with limited decline, falling 0.23 points from the previous month. Compared to January of the previous year, the Composite Index was 1.62 points higher and remained generally stagnant.

Composite Index expected to remain stagnant

The Construction Materials Industry Composite Index recorded a 0.23 point decline in January compared to the previous month. The Composite Index, which is expected to remain generally stagnant, reached 71.12 points in January. The report indicated that the Composite Index's performance in the first quarter of the new year would be determined by developments preceding local elections, economic policies, seasonality and the trajectory of geopolitical risks compared to January of the previous year, which showed a 1.62 point increase. Tightening policies had an impact on the decline in activities The Activity Index, which started the year with a decline, fell 1.6 points in January compared to the previous month to 143.9 points. According to the report, the effects of monetary policy tightening on domestic market sales were observed in January. The Activity Index performed 9.5 points above January of the previous year. Global market slowdown continued in the first month of the new year. Seasonality was effective in January and limited the Activity Index. According to the report; domestic sales showed a decline in January compared to the previous month, and with tight monetary policy, domestic sales began to contract. Exports fell significantly in January. While exports weakened with market slowdown, Turkish Lira revaluation limited exports. Production declined in January, and revenues also fell. Foreign sales prices showed renewed increases in January. The report stated that activities in the construction materials industry would continue to be determined domestically by developments preceding local elections, economic policies and seasonality, and externally by slowdown. It was noted that there was no expectation of a weak Activity Index for the first quarter of the new year.

Confidence Index remained weak and fragile

According to the Turkey İMSAD report closely monitored by economic circles; the Confidence Index declined by 0.07 points in January compared to the previous month to 32.88 points. The report stated that the decline in the Confidence Index was influenced by the contraction in activities. In this context, economic policies also had an effect on confidence levels that remained weak and fragile. Confidence in the construction sector and construction materials industry remained unchanged. Domestic market confidence declined marginally in January, while confidence in export markets increased in January. The report noted that confidence concerns persisted regarding the political sustainability of changes in economic policies, and expectations for activity before local elections have yet to materialize. Accordingly, confidence is estimated to remain weak at least until the local elections.

Expectations Index began the year with an increase

According to the report; the Expectations Index, which began the year with an increase, continued its limited growth in January. The Expectations Index increased by 0.34 points in January compared to the previous month and began the year at 57.94 points. Despite the increase, stagnation in domestic and export orders limited expectations. Seasonality also had an effect on limiting expectations. In shaping expectations, new economic policy implementations and received domestic and foreign orders despite global risks were determining factors. In January, new economic policies became more effective while domestic and foreign orders remained stagnant. Limited growth was observed in domestic orders received for the first quarter of the year, while exports declined for the fifth consecutive month as of January. On the other hand, production, investment and employment expectations for the next three months showed significant increases in January compared to the previous month. In this context, production expectations showed significant recovery. Expectations are anticipated to remain stagnant and optimistic before local elections, while global geopolitical risks could have different impacts.