ANKARA
The Turkish index for confidence in the manufacturing and service sectors dropped 2.39 points in October, but stayed above 50, the Independent Industrialists and Businessmen's Association said on Friday.
The October purchasing managers' composite index fell to 52.92, but it has held over the 50 base line for nine consecutive months.
Readings below 50 indicate lack of confidence, above fifty confidence in growth.
Behind the lower reading is a significant slowdown in purchasing, including a lack of new orders and lower levels of production, according to the president of the association, Nail Olpak.
"But the index has been above 50 in the last nine months, and that indicates confidence in expansion," Olpak said.
The sub-indices of employment and suppliers’ delivery time played a significant role in the service index. The sub-indices for suppliers’ delivery time and employment of inputs fell by 4.97 and 5.78 respectively.
The PMI surveys 500 small and medium-sized manufacturers and service firms.
The business association also expects that Turkey's growth rate will be 3.3 percent for the year.
However Olpak said that "usually, at the end of the year, companies have no intention of buying and selling inventory, and that may explain the slight decline."
There have been two occasions in which the index came in lower than 50 in recent years. One of them was during the anti-government demonstrations in Istanbul's Gezi Park, and other one was during the corruption investigation of Dec. 17 of last year, which involved politicians and businessmen in Turkey.
The Turkish Statistical Institute said industrial production trended higher for the fifth successive month, after climbing 1.7 percent in September compared with the previous month. Production has maintained a growth trend since June. Industrial production also rose on an annual basis in September, jumping 2.2 percent compared with the previous year.
Turkey’s growth rate was 4.3 percent in the first quarter of 2014, but it slowed in the second quarter to 2.1 percent.
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