A Brief Overview of Some Selected Sectors
• In this first edition of our sectoral report, we have compiled some anecdotal evidence and data from key sectors/industries to add some tone and color to our macroeconomic analysis.
• We kept our focus narrow on just 5 business lines/industries for now, to keep the presentation manageable. If our new product receives positive feedback, we plan to expand our scope. Below are a summary of our findings...
• Results here, though cover a small segment of key sectors, corroborate with macroeconomic developments, of a rebound in economic activity, especially in specific sectors that have benefited from government support, low rates and pent-up demand, while, unsurprisingly, there are severe signs of distress in others, notably the tourism sector.
• Put differently, with the exception of automotive, housing and to a lesser extent construction sectors, sectoral news sees a slowdown of contraction in key sectors. Given the fact that these sectors are very sensitive to credit conditions, a generalized deceleration of economic activity is a more likely scenario than faster recovery.
• It is too soon to speak of full recovery in the housing sector, as the main driver has been existing home sales (with increase in first home sales since the beginning of the year just at around 10%) with share in total hovering at historically low levels, while higher interest rates should further dampen sales in the period ahead.
• The Automotive Manufacturers’ Association data show sales through August are almost 70% higher than the same period of 2019. The 12-month cumulative sales are lower than the pre-2018 levels, however, indicating that the recovery is still relatively subdued, and there is much room for catching up, though the latest SCT adjustment should stall growth.
• 2020 is a lost year for the tourism sector not only in Turkey, but around the world, because of the devastating effects of the pandemic on the hospitality industry. Total revenue loss in the whole year, going with recent statements from Minister Albayrak, is expected to exceed $20 billion.
• In retail trade, President of Istanbul Textile & Raw Materials Exporters’ Association spoke very positively on exports, capacity utilization rates in the sector, while the President of United Brands Association, which represents 325 of 416 national brands, was less upbeat, stating that August turnover of brands in some sectors decreased compared to July.
• Electricity output, which started to recover in June and July, registered growth rates of 3.8% and 3.5% for generation and consumption, respectively, in August. High-frequency (daily) data shows further recovery for September.
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