Survey paints gloomy picture
Posted by meb at February 13th, 2008
A survey announced yesterday shows the economic outlook in Turkey’s biggest city is far from being bright, as firms deal with an increasing number of bounced checks and protested bills. The ‘Economic Situation’ survey by the Istanbul Chamber of Industry (ISO) shows a deterioration in industry.
The study suggests that the percentage of firms which have encountered bounced checks and protested bills increased to 72.7 in the second half of 2007, compared to 64.3 in the first half. This figure was the highest since 1999, when the annual survey was launched. Commenting on the situation, the report said an ‘overvalued currency has made imports cheaper, endangering Turkish companies.’
The second half of 2007 was worse than the first half, in terms of production. The ratio of companies which reported increase in production was 52.7 in the first half, but this figure dropped to 46.3 in the second. The percentage of those who reported a decrease rose from 24.7 to 30.
Istanbul’s food, alcoholic drinks and tobacco industries experienced the strongest growth in domestic sales over the second half of 2007, with leather and shoe industries experiencing the greatest drop.
The survey, which highlighted that industries in Istanbul contribute some 35 percent of the value added tax (VAT) income in Turkey, also focused on export ratios, employment in different industries and financing models used by industries.
Whilst domestic leather and shoe sales dropped in 43.8 percent of the 580 businesses that responded to the survey, food, alcoholic drinks and tobacco sales increased in 65.6 of businesses surveyed.
On the other hand, the leather and shoe sector was the leading sector in exports over the second half of 2007, with 81.3 percent of respondents involved in sales abroad.
Exports made the highest proportion of turnover in the clothes sector (68.5 percent), whilst at the leather and shoes industry they made 44.1 percent. In food, alcohol drinks and tobacco industries exports made only 21.6 percent of total turnover.
Unemployment highlighted:
At present some 929,000 people in Istanbul are unemployed, the survey suggests. The survey also highlighted growing unemployment of young people in Istanbul, which during the first half of 2007 increased from 18.8 per cent to 19.8 per cent. “In order to resolve the issue of joblessness, employment issues must be placed in the forefront of macroeconomic policies. The first one of the issues to be tackled is the high taxes and premiums that are a burden to employers,” the report said.
The survey shows profitability has also deteriorated. Nearly 35 percent of companies surveyed said profitability was betterin the first half of 2007 compared to 2006. This figure decreased to 32.4 in the second half. Those who said profitability fell increased to 36.3 percent, from 29.2. The percentage of those who reported losses increased to 9.8 from 8.3.
Source: Turkish Daily News
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