2007 has been tough on sectors, says survey
Posted by meb at February 25th, 2008
A substantial number of sectors faced more difficulties in 2007 compared to 2006, revealed a poll conducted by the Ankara Chamber of Commerce (ATO).
The poll suggests that 2007 was worse than the previous year for 56 percent of the 4,046 enterprises at 42 shopping and trade centers surveyed by ATO in Ankara.
The consumer’s purchasing power declined after the slowdown of growth last year, according to the poll, which is based on economic indicators such as domestic sales, profits, collection of revenues, number of employees and investments. There has been stagnation in the real sector for a long time, said ATO Chairman Sinan Aygün. “We are taking an X-ray of the markets with this poll.” The market activity is not reflected in shopping rates, as customers just look at the shop windows, he said. “The purchasing power of citizens has declined. Artisans are unable to meet the rent, worker wages, electricity, water and natural gas costs.” Some measures should be taken at least to reduce business costs, Aygün said. “Turkey is hungry for growth, and young population is unemployed. For a hungry country, a growth rate of 4-5 percent is as inadequate as a feeding bottle of milk.”
The sectors that suffered the most from the shrinkage in 2007 include upholsterers and furniture manufacturers, furniture, carpet and brown goods sellers, and real estate brokers. Among all enterprises surveyed, only 15.8 percent found 2007 more positive than 2006. The rate was relatively higher for bus companies, oil derivatives and the construction sector.
Decline in sales reduces profit:
In 2007, domestic sales declined for 57 percent of the enterprises while domestic sales came to a standstill for 24.2 percent. Real estate brokers suffered the most from the decline in domestic sales. The oil derivates sector was affected relatively less compared to the other sectors in terms of sales. Decline in sales also resulted in a drop in profit rates, particularly for real estate brokers. Restaurants, patisseries, coffee houses as well as the transportation sector witnessed a noteworthy drop in their profit rates: 66.5 percent of the enterprises witnessed a decline in profit in 2007. Only 12 percent of the enterprises reported a rise in profits. Some 27.8 percent of the enterprises operating in the oil derivatives sector increased their profits in 2007. In terms of business costs, 80.5 percent of the enterprises reported an increase while 7.7 percent noted a decline. In 2007, 53 percent of the enterprises had more problems collecting revenues. Some 89 percent of upholsterers and furniture manufacturers saw a rise in collection-related problems. In 2007, 30.4 percent of the enterprises had to fire employees. Upholsterers and furniture manufacturers loomed large in this category with 66.7 percent. However, the construction, electronics and oil derivatives sectors witnessed an increase in employment.
Investments failed to reach the expected levels in 2007. Among the surveyed enterprises, 39.6 percent did not introduce any investment while 28.2 percent invested less than 2006.
Source: Turkish Daily News
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