Positive Expectations Scale Up TEPE TEPE that marked up after the decline in May maintained the upwards trend in July

ANKARA –In July 2013, TEPE increased both year-on-year and month-on-month while the anticipation for recovery in business activities showed deterioration. On the other hand, expectations for the next three years marked the highest level so far. Retail confidence improved also in the EU and the Eurozone both year-on-year and month-on-month.

TEPE that marked up after the decline in May maintained the upwards trend in July and had a value of 0.8. This indicates a month-on-month increase by 1.3 points and a year-on-year  increase by 6.1 points.

50.1 percent of TEPE survey participants expect an improvement in their business activities in the next three months while 17.9 percent expect deterioration. The balance value of the expectations for the next three months was 29.6 in July 2013. Sales expectations reached the highest level of the series so far with an increase of 23.8 compared to July 2012 and of 8 points compared to June 2013. Sales expectations showed a decline from June to July in the next three years.

The balance value of the volume of business activities in July 2013 compared to the same period in the previous year was minus 34.4. Anticipation for year-on-year recovery in business activities therefore decreased by 0.7 points compared to June 2013 and by 9.4 points compared to July 2012.

The EU-27 Retail Confidence Index had a value of minus 7 in July 2013, with an increase of 3.3 points month-on-month and 3.2 points year-on-year. Over the last twelve months, Turkey performed better than both the EU-27 and the Eurozone

Comparing the retail confidence indices for the EU-27 countries and Turkey, the highest year-on-year improvement in retail confidence was seen in Slovenia, followed by Lithuania, Spain and Greece. Finland marked the sharpest year-on-year decline, followed by Austria and Slovakia. The United Kingdom demonstrated the strongest year-on-year improvement. The EU-27 performed stronger than the Eurozone.

Compared to July 2012, the electrical appliances, radio and televisions sector was the best performer. This was followed by motor vehicles and the “others (gas station, pharmacy, perfumery, hardware, glassware, stationery etc)” sectors. The year-on-year improvement in performance was below the average for furniture, lighting equipment and household articles, and non-specialized stores sectors. All sectors other than the named five showed weaker performances compared to 2012. The worst performer was in the textiles, ready-made clothing, and footwear sector.

Question-based assessment of the TEPE survey results suggests that compared to June 2013, expectations for orders, sales and sales prices in the next three months and for the number of stores in the next twelve months increased. All other conditions and expectations decreased. The largest improvement was in the expectation for sales in the next three months and the largest drop was in the volume of business activities compared to the year before. The outlook was the same compared to July 2012. The biggest improvement was in the expectations for orders placed with suppliers and sales in the next three months. It is worth noting that expectations for new employment decreased both month-on-month and year-on-year.

Konya’s retail sector more buoyant than the year before:

In the context of the Konya Province Retail Confidence Index (KOPE) carried out in cooperation by Konya Chamber of Commerce (KTO) and the Economic Policy Research Foundation of Turkey (TEPAV), face-to-face interviews with 300 retailers from Konya have been carried out on a monthly basis since February 2012.

In July 2013, KOPE had a value of minus 1, compared to TEPE at 2.4. Preserving the downwards trend in May and June, KOPE was in the negatives also in July. Konya’s retail sector performed worse than the overall Turkey but better than the EU-27. KOPE showed a year-on-year increase by 2.4 points, while TEPE increased by 6.1 points.

Expectations for orders placed with suppliers, sales and sales prices in the next three months increased while the volume of business activities compared to the previous three months decreased both year-on-year and month-on-month. 43.7 percent of retailers in Konya expect an improvement in business activities in the next three months while 56.5 percent declare that the volume of business activities worsened compared to July 2012.