Manufacturing Turkish industrial capacity use falls again By William Sellars February 25, 2025, 7:03 PM Unsplash+/Getty The food and beverage sector was one of the few to post increased capacity usage 74% operational in February High domestic costs a factor Durable consumer goods weakest The level of Turkish industrial capacity in use fell in February, continuing a trend of slowing activity in the country’s factories for a third month. Less than three quarters of Turkey’s industrial capacity was operational in February, according to data issued by the Turkish Central Bank’s statistics unit on February 24. The 74 percent total was marginally down on the January figure and represented a 2 percent fall year on year. According to Professor Öner Günçavdı, an economist at the Istanbul Technical University, among the biggest factors weighing on industry is a fall in exports and high domestic costs. “High production costs and a low foreign currency exchange rate has reduced demand, with it being impossible to achieve acceptable pricing levels,” Günçavdı told AGBI. “Domestically, prices have been too high for the market while it has become more cost effective to import the same products.” The February result was the third month in a row that capacity utilisation has declined and was the lowest level since March 2023. The worst performing industrial segment was durable consumer goods, in which capacity usage fell to 70 percent, the weakest result in three years. Turkey says talks with Abu Dhabi fail on port deal Confidence builds in Turkish real economy Turkish cruise industry expects a bumper 2025 This was offset to some degree by increases in production activity in the non-durable consumer goods, consumer goods and food and beverage segments, all of which posted modest increases, though all three remained stuck around the 75 percent capacity level. Underscoring the weaker industrial climate was a steep fall in utilisation of plant for producing investment goods, down to just 72 percent, a rate last seen in July 2021, and an indicator that demand for supplies and equipment necessary for increasing output was declining, something Günçavdı attributes in part to Turkey’s high interest rates. “Industries could not invest while borrowing rates were at 53 percent in 2024, and even with the policy interest rate cut to 43 percent it is still not viable,” he said.
