The Construction Materials Industry Composite Index prepared by Türkiye İMSAD was supported by the activity in June, but was limited by the weakening in confidence and expectations. Despite the seasonality and volatility in activities, expectations for the second half of the year decreased. Concern about the slowdown in export markets, which started after a long time, came to the fore as one of the reasons that weakened confidence. The June results of the Construction Materials Industry Composite Index prepared by the Turkish Construction Material Industrialists’ Association (Turkey IMSAD) have been announced. With the normalization of the number of working days in June, the sector gained momentum, while the weakening in expectations for the rest of the year drew attention. Composite Index decreased slightly in June. While the activity in activity supported the Composite Index, the weakening in confidence and expectations caused the index to decline. Composite Index, which recorded a limited decline after May, decreased by 0.05 points to 74.76 points in June.
The effects of the high season were felt
The positive contribution of the high season in the construction materials industry and the increase in the number of working days compared to the previous month caused significant increases in activities. In this period, increases were observed in domestic and foreign demand, while the restraining effect of high inflation and costs remained weak. The Activity Index, which became stagnant with the decrease in the number of working days in May, showed a jump in June. While there were increases in all activity groups with the effect of the high season, the activity in domestic and foreign demand made a great contribution to the index. In addition to domestic sales, an increase was recorded on the export side. Increasing domestic and foreign demand, along with the normalization in the number of working days, led to an increase in production. On the turnover side, a high increase was seen, some of which was due to inflation. Despite the negative economic developments, the dynamism in domestic and foreign demand continues.
Confidence Index remained fragile and weak in the first half of the year
Confidence Index also showed a limited decrease in June, decreasing by 0.63 points compared to the previous month. Thus, the Confidence Index remained fragile and weak throughout the first half of the year. Despite the mobilization in the activities, the loss of confidence continued due to the testing of a new economic model, the Russia-Ukraine war and economic factors. In addition, the worry of slowdown in export markets after a long time was one of the reasons that weakened confidence. In this period, it was observed that the level of confidence in the Turkish economy declined to a limited extent. Confidence in the construction sector and construction materials industry, on the other hand, showed limited decreases. Confidence level in domestic markets decreased slightly. The level of confidence in export markets also declined after a long time.
Export orders decline for the first time in a long time
While the sub-indicators of the economy regressed, the declines in the sector-related indicators continued. The declines in domestic and foreign orders weakened expectations. The Expectation Index continued its decline in June and decreased by 1.1 points compared to the previous month. In this period, there was a limited decline in expectations regarding the Turkish economy. High costs limited domestic market orders despite the high season. Domestic orders for the next three months decreased slightly. Export orders for the next three months also declined for the first time in a long time. The slowdown in export markets began to be felt. The production expectation for the next three months weakened, especially with the decline in domestic and foreign demand, and declined in June. Despite the seasonality and activity, high inflation, cost increases and the slowdown in domestic and foreign demand weakened expectations.