Turkey: Manufacturing capacity rate higher in September

ANKARA

The rate of manufacturing capacity utilization rose in September, according to a report from the Turkish Statistical Institute released on Monday.

Capacity utilization measures the rate at which potential production levels are being used.

The capacity utilization rate was up to 75.4 percent in September from 74.4 percent in August.

"Turkey's growing population, with its continuing consumer demand, is driving increased manufacturing activity, in line with rising industrial production," Bora Tamer Yilmaz, an economist with Ziraat Securities, told Anadolu Agency on Monday.

Motor vehicle manufacturing capacity jumped to 80.3 percent in September, from 74.8 percent in August.

Electrical equipment capacity utilization also rose to 78.8 percent from 75.2 percent in August.

"Further, there is continuing demand from Germany for Turkish intermediate goods used in the country's exports," Yilmaz explained. "While growth has slowed in Germany, exports are still strong, and the country is the largest buyer of Turkish components," he added.

But manufacturing confidence fell slightly in September. The confidence in the outlook for manufacturing dropped to a reading of 99.1 on the index, from 103.7 in August.

"The political situation in Turkey, ahead of elections in November, is weighing on business confidence in every sector," Yilmaz said. "It is hurting the economy as well. But Turkey should still see some growth in the next quarter, and that may bolster confidence," he added.