December 2022 results of the Construction Materials Industry Composite Index, which is systematically published every month by the Turkish Construction Equipment Manufacturers Association (Turkey IMSAD), the umbrella organization of the construction materials sector, has been announced.
Accordingly, the Composite Index, which regressed for 7 months in a row due to contractions in the domestic market and seasonal effects, decreased by 0.01 to 69.51 points in the last month of the year compared to the previous month. While the Composite Index started the new year optimistically with the improvement in confidence and expectations, the expectation that the pillars in the last period will make a positive contribution to the sector stands out.
Support packages will increase domestic demand
According to the monthly information announced by Türkiye İMSAD; The Activity Index decreased by 0.9 points in December compared to the previous month. Similar trends were observed in the sub-activity clusters, in the direction of finite shrinkage. While the activity in the domestic market continued, albeit at a slower pace, a more noticeable slowdown was observed in the export markets. While the domestic sales in the construction materials branch showed a limited decrease in December, the export decline, which had been going on for a long time, continued.
According to the index, which stated that there was a certain decline in production in the last month of 2022, activities gradually became stagnant. While seasonal effects stood out as the main reason for the decline in domestic demand, the slowdown in foreign demand also had a negative impact on activities. However, many support packages announced recently are expected to support domestic demand and sales during the winter months.
Confidence Index rises for the first time in 16 months
Despite the decline in activity, the Faith Index, which entered a regression period as of August 2021, increased in December 2022, albeit finitely. The foundations given to the economy and construction sector came to the fore as the most valuable reason for the rise in belief after a long time. However, it was observed that the Trust Index, which increased by 0.21 points in December compared to the previous month, remained fragile and weak against this increase after a long time.
While the level of belief in the Turkish economy did not change, the confidence in the construction branch and the construction equipment industry increased in a limited way. Accordingly, the belief in export markets made progress on the upper side in December. The positive situation in the Faith Index created an optimistic picture for the new year and supported the expectation of activity in the domestic market, especially in the new year.
Expectations Index rose in the last month of 2022
The Expectation Index, on the other hand, increased by 0.2 points in December compared to the previous month. While the regression in economic expectations became stagnant, there was improvement in the expectations of the department. With the rise in the subject of words, the Expectation Index has stopped the decline that has been going on for seven months. Despite the weakening in domestic and foreign market conditions, expectations for the segment in general rose, while expectations for the Turkish economy remained unchanged. Thus, the decline in economic expectations came to an end after a long time.
On the other hand, domestic orders received for the next three months continued to decline at a slower pace. With these results, while the contraction in export markets was felt more clearly in December, optimistic signs for the upcoming period were given for sectoral expectations.