Exporters are more optimistic in terms of Turkish economy when compared to the previous period
The 2015 4th quarter realization and 2016 1st quarter expectations survey of Turkish Exporters' Assembly (TIM) was announced. According to the survey conducted with the participation of 505 exporting companies, the USA, China and Germany came to the fore as large markets with high capacity and as target countries.
Mehmet Büyükekşi, the Chairman of TIM, pointed out that they gave a place to the developments related to Russia in “Exporters' Tendency Survey, and he stated: “Almost all of the companies making exportation to Russia now compensate their losses of exportation by heading for different markets. Accordingly, the European markets are targeted with 49%, the markets of the Middle East with 36%, and African markets with 31%”.
The 2015 4th quarter realization and 2016 1st quarter expectations survey of Turkish Exporters' Assembly (TIM) was announced. The survey addressing the expectations of the exporters in numerous fields such as input costs, production, exchange rates, profitability, new target markets and employment will direct the exportation of Turkey. Mehmet Büyükekşi, the Chairman of TIM, evaluated the data of the survey, and he remarked: “when the expectations of our exporters for 2016 first quarter are compared to the expectations for the previous term, it is seen that they are more optimistic with an increase of approximately 10 points in average rates in the sectors and Turkey's economy. This situation fills us with hope for the year 2016”.
Senior executives of 505 exporting companies participated in the survey of “Exporters' Tendency Analysis” conducted by TIM, and the survey demonstrated the realizations observed in the 4th quarter of 2015 and the expectations for the 1st quarter of 2016. According to the survey, the expectations of the exporters on European economy continue to show an increase while it is remarkable that only 25% of them predicted a pessimistic scene about the EU. The USA, Germany and China came to the fore as target markets according to the data of the survey.
24.3% of the companies will make R&D investments
Büyükekşi said that the focus of the exporters on large markets with high capacity as an alternative was a very positive development for them. He also pointed out that 24,3 % of the companies planned to make investments in R&D/Innovation in the first quarter of the year, which was a hopeful initiative for the future. He continued as follows: “As TIM, we are quite pleased to see the positive outcomes of the works that we performed in the field of Innovation, R&D, Design and Branding”.
Mehmet Büyükekşi, the Chairman of TIM, said that the developments regarding Russia took part in the agenda of the survey, and he remarked: “Almost all of the companies making exportation to Russia now compensate their losses of exportation by heading for different markets. Our companies state that they have given the priority to the European market with 49% within the scope of the actions taken against the possibility of the reduction in the exportation to Russia. The European market is followed by the markets of Middle East with 36% and the African markets with 31%. 14% of our exporters say that they will head for the domestic markets, and 27% of them state that they will not make any amendment in their strategies of exportation”.
Prominent headlines from the survey:
The exporters foresee the USA as the target market with 20% in the first quarter of 2016. Germany is considered as the second target market with 12% and it is followed by China, Iran and the Great Britain, respectively.
23.8% of the companies pointed out that in the 4th quarter of 2015 an increase was observed in the number of white-collar workers when compared to the same quarter of the previous year. 27.9% stated that the number of blue-collar workers increased while 12.3% remarked that this increase was seen in the number of R&D personnel.
It is seen that in the 4th quarter of the previous year 42.8% of the investments of the companies were made in the field of modernization, and that 27.9% were made in the capacity increase. The investments made in new capacity and R&D, and showing an increase in the rates give us hope for the future.
In the first quarter of 2016, 30.1% of the companies aiming to make new investments plan to invest in modernization, 23% of them in the capacity in domestic fields, and 18.8% in R&D/Innovation. Accordingly, an increase of 5.1 points is observed in the rates of the companies making investments in capacity, and an increase of 4.1 points in the rates of the companies making R&D investments, which is a quite positive outcome.
Major problems of the Exporters
The major problem of the exporters comes to the fore as the exchange rates with a percentage of 43.8. It is followed by the high costs of energy at 41.2%, the prices of raw material and intermediate goods at 37.8%, the costs of employment at 36.8% and the costs of logistics at 34.3%. While an important regression is observed in the problem of instability in the exchange rates in comparison with previous quarters, the negative impact of the parity is expected to be seen at a more restricted level in 2016.
The expectation of the exporters regarding the average exchange rate of dollar is 3.02 in the first quarter of 2016 while the expectation regarding the euro is 3.27. On the other hand, the expectation of parity is 1.07. The dollar exchange rate estimate for the end of the year is 3.14 and 3.40 for the euro. However, in spite of all these figures, the ideal competitive foreign exchange rate expectation of the exporters is 2.90 for the dollar and 3.19 for the euro.
According to the survey, the estimated year-end inflation rate is 8.44 percent, and the one-week repo rate is 8 percent. The growth estimate for the first quarter is around 3 percent, and this figure is predicted to become 4.2 percent at the end of the year.