In December 2021, the seasonally and calendar-adjusted SAMEKS Composite Index decreased by 3.1 points compared to the previous month, falling to 48.8.

This loss of momentum was driven by the services sector index, which decreased by 2.1 points compared to the previous month, to 48.1 points. The industrial sector index, while above the reference value, lost 5.3 points compared to the previous month, falling to 51.4 points.

The decline observed in the services sector during this period was driven by a contraction in business volume due to reduced input purchases. In the industrial sector, the sharp decrease in new orders compared to the previous month led to a decrease in production across the sector.

As a result of these developments, the seasonally and calendar-adjusted SAMEKS Composite Index, which stood at 48.8, showed: It fell to its lowest level in four months and fell below the 50-point reference value for the first time since August 2021.

Industrial Sector SAMEKS Index

The seasonally and calendar-adjusted Industrial Sector SAMEKS Index decreased by 5.3 points in December 2021 compared to the previous month, falling to 51.4.

New orders, which fell by 8.0 points compared to the previous month to 49.6, were the determining factor in the overall loss of momentum across the industrial sector during this period.

As input cost increases continued during this period, companies continued their advance purchases, and despite the decline in new orders, purchases increased by 4.1 points to 78.6. Despite the increase in purchases, the decline in new orders led to an increase in finished goods inventory, and this sub-index, which rose by 8.5 points compared to the previous month, reached 50.6 points. The suppliers' delivery time sub-index, which decreased by 5.6 points to 49.9 during this period, also indicates disruptions in companies' supply processes.

As a result of these developments, the production sub-index for the industrial sector decreased by 8.7 points compared to the previous month, falling to 40.7. The employment sub-index increased by 1.1 points compared to the previous month, reaching 51.8, maintaining its positive outlook during this period.

Thus, the Industrial SAMEKS Index, which decreased by 5.3 points compared to the previous month to 51.4 points, indicated that the sector-wide increase had lost momentum compared to the previous month.

Service SAMEKS Index

The seasonally and calendar-adjusted Services SAMEKS Index decreased by 2.1 points compared to the previous month, falling to 48.1 in December 2021.

During this period, input purchases decreased by 7.6 points compared to the previous month, falling to 64.3. With this loss of momentum in increasing input purchases, business volume in the services sector decreased by 0.6 points compared to the previous month, falling to 41.2. This level was the lowest level of the business volume sub-index in the last quarter of the year.

The final goods inventory sub-index, which decreased by 2.6 points compared to the previous month to 41.8, and the suppliers' delivery time sub-index, which decreased by 2.8 points to 47.1, were other factors contributing to the contraction observed in the services sector index during this period. As a result of these developments, labor demand for the sector remained stagnant, and the employment sub-index decreased by 0.7 points compared to the previous month, falling to 47.4.

Thus, the Services Sector SAMEKS Index, which decreased by 2.1 points to 48.1 in December, fell below the reference value of 50 for the first time in the last quarter of the year, indicating that economic activity across the sector contracted compared to the previous month.

COMMENT:

The seasonally and calendar-adjusted SAMEKS Composite Index, which closed the third quarter of the year with an average of 50.5, closed the final quarter of the year with an average of 51.9. While this average was influenced by the positive outlook of the real sector in October and November, a noticeable loss of momentum occurred in the final month of the year. This development reflects the impact of the extreme fluctuations observed in the exchange rate in December, and a rapid normalization trend was observed in the markets following the Turkish Lira Promotion Package announced by President Recep Tayyip Erdoğan on December 20. SAMEKS's 2021 average score of 51.6 points supports our expectation of double-digit growth for the Turkish economy for the entire year. In addition to the end of excessive exchange rate volatility, domestic demand, net foreign demand, and investments expected to increase due to falling interest rates provide important signals that the Turkish economy will continue to decouple positively in 2022.