Exporter is hopeful for 2016 with new market search
According to the survey of Turkish Exporters Assembly (TIM) made with the participation of 470 exporter firms on 2016 first quarter realization and second quarter expectation USA, Iran, Germany and England came forward as target countries for exporters. After the lifting of embargo on Iran, it became the second target country for our exporters.
TIM Chairman Mehmet Büyükekşi said “We believe that our exporters must enter into new markets in order to overcome all geopolitical risks. Investments and new market searches made for this goal give us hope. More than one third of our exporters entered new markets”.
Percentage of exporters who expect the production and export will not decrease became 77 percent and 68.6 percent respectively.
34.5 percent of the firms are planning to increase employment in the second quarter.
Increase of the minimum wage affected the exporters adversely.
64 percent of the exporters expect the Central Bank to continue the interest rate reductions.
Turkish Exporters Assembly (TIM) shared with the public the results of exporters' trend survey covering the first quarter realization and second quarter expectation of 2016. The survey, which assessed the expectations of the exporters in many areas from input costs to production, exchange rates to profitability, new market targets to employment, will give direction to the exports of Turkey. According to the data of the survey that included 470 firms, among the markets that the exporters aim to enter for the first time USA was placed first with 16.8 percent. It was followed by Iran with 14.7, Germany with 10.4, England with 9.1 percent. After the lifting of embargo on Iran, it became the second target country for our exporters.
TIM Chairman Mehmet Büyükekşi assessed the survey data and he pointed out that the reason for the profitability growth ratio remaining low while there is growth in export and production was that the improvements in foreign markets were below the expectations. Büyükekşi said “We can increase our profitability only be developing and exporting innovative products. We have to emphasize design, R&D, innovation and branding in order to realize high-added value exports”.
International sale networks will improve
Büyükekşi underlined the importance of the fact that in the second quarter of 2016 firms' domestic preferences are 30.6 percent for modernization, 20.4 percent for capacity increase and 17 percent for R&D and innovation investment. Büyükekşi mentioned the investment plans of the firms outside Turkey and added “We believe that our exporters must enter into new markets in order to overcome all geopolitical risks. Our firms are renewing their investments in Turkey and increasing their capacities; they also aim to make exports to every corner of the world by improving their sales networks outside Turkey. Our firms' new market searches give us hope”.
According to TIM trend survey, prominent data are as follows:
More than one third of our exporters entered new markets
The percentage of firms that entered new markets in the first quarter of the year was 37.2 percent, quite similar to the previous quarter. The percentage of exporters that lost their markets completely remained at a relatively low level of 20 percent; 55.1 of the exporters informed that they gained new customers in existing markets.
Profitability ratio expectation went up
As for the expectations for the second quarter of 2016, the percentage of exporters who expect that the production and export will not decrease became 77 percent and 68.6 percent respectively. These data show similarities with the last period. The percentage of exporters that believe that the general profitability ration will not decrease was 44.2 percent last period, it rose to 59.2 percent this period.
Domestic raw material use ratios are satisfactory
Firms participating the survey indicated that 67 percent of the raw materials on the average are of domestic origin. The sector with highest dependency on foreign raw materials was chemical articles sector, the lowest one herbal products.
Employment will increase
Average number of employees of the firms participating the survey in the first quarter was 148 persons. In this period, the ratio of women employees became 17 percent. About 34.5 percent of the firms are planning to increase employment in the second quarter of 2016.
Exchange rate and inflation predictions supportive of exports
In the 2016 year-end market expectations of exporters USD/TL exchange rate prediction was 3.04, EURO/TL exchange rate prediction was 3.38 and EUR/USD parity prediction was 1.11. 2016 year-end inflation estimate became 8.14 percent, year-end growth estimate 4.2 percent.
R&D awareness is parallel to the company size
Familiarity with the new R&D law was seen to be at the level of 46 percent in big companies and 29 percent in small companies. These percentages indicate that R&D awareness is parallel to the company size. In general, it is observed that 15 percent of the firms participating the survey are planning to open R&D and Design Centers in 2016.
Increase of the minimum wage affected the exporters adversely
The percentage of firms that said the practice of net minimum wage of 1300 TL as of 2016 affected the exports adversely turned out to be quite high with 54 percent.
Exporters expect interest rate reduction
According to the survey, 64 percent of the exporters expect the Central Bank continue with interest rate reductions.