Turkish industrial confidence falls as business outlook weakens sharply

Turkey’s industrial confidence index fell in September after the business outlook among firms worsened.

Confidence declined to 105.3 this month from 106.2 in August, the central bank said on Thursday. The index fell for the first month in five.

The outlook for the general business situation slid to 94.7 from 100.7 in the second-straight monthly decline. It was the lowest reading since May.

Estimates for the volume of output for the next three months also fell to 119.3 from 130.3, while a measure of the current situation of stocks of finished goods declined to 101.4 from 106.5.

Turkey’s government is seeking to turn an economic contraction in the first half of the year into growth of about 1 percent in 2020. Economic activity fell by almost 10 percent annually in the second quarter as the fallout from the COVID-19 pandemic pummelled company sales and consumer sentiment.

A gauge of the total amount of current orders of firms rose to 83.2 in September from 78 in August. The outlook for export orders over the next three months also improved to 123.8 from 120.2, the central bank said.

The decline in confidence comes after the Turkish lira plumbed successive lows against the dollar this month and new cases of the coronavirus spiked to the highest levels in four months. A volatile currency makes it more difficult for companies' to predict the future and causes some consumers and businesses to put off purchases.