Turkey's CUR down in May, but beats expectations

Turkey’s CUR down in May, but beats expectations

Turkey's State Institute of Statistics (DIE) disclosed that the country's capacity utilization rate (CUR) in the manufacturing industry fell from 84.3% in May 2004 to 82.4% in May 2005. However, this figure was higher than market expectations of 81.7%. CUR in the public sector, which fuelled the overall CUR increase, increased from 60.1% a year earlier to 64.5% in May. The rise in CUR of petroleum and chemicals products coupled with the production of basic metal and machine was a major factor in the public sector's CUR increase. On the other hand, CUR in the private sector fell from 74.4% to 71%. The decline in private sector's CUR may indicate a relative slowdown in the economy. Since the beginning of the year, the weak CUR in production of machine and equipment could be the signal of the slowdown in investment demand. However, the appreciation of TRY and interest rates are expected to prop up the investment demand.