Turkey’s capacity utilization rate for November 2025 was reported at 74.40%, up 0.20 percentage points from October’s 74.20%, according to the Sigmanomics database. This figure aligns with market expectations and marks a slight rebound after a mid-year dip to 73.50% in August. The current reading remains marginally below the 12-month average of 74.50%, signaling subdued industrial momentum amid persistent macroeconomic headwinds.

Drivers this month

• Incremental recovery in manufacturing output, particularly in automotive and machinery sectors.
• Stabilization of domestic demand following recent monetary tightening.
• Moderate improvement in export orders despite global trade uncertainties.

Policy pulse

The Central Bank of Turkey’s recent interest rate hikes have started to temper inflation expectations, but elevated borrowing costs continue to restrain capacity expansion. The 74.40% utilization rate remains below the pre-pandemic peak of 77.30% seen in early 2020, indicating room for growth but also caution in capital spending.

Market lens

Following the release, the Turkish lira (TRYUSD) showed mild appreciation, reflecting investor relief at the stable print. Short-term bond yields edged down by 5 basis points, signaling reduced risk premia. Equity markets responded positively, with the BIST 100 index gaining 0.40% in early trading.

Capacity utilization is a key barometer of industrial health and economic slack. Turkey’s 74.40% reading in November compares to 74.20% in October and a 12-month average of 74.50%. Historically, the rate has fluctuated between 73.50% and 75.00% over the past year, reflecting cyclical pressures and structural shifts.

Monetary Policy & Financial Conditions

The Central Bank’s tightening cycle, with policy rates rising to 25%, aims to curb inflation running above 40%. Higher rates have increased financing costs for manufacturers, limiting new capacity investments. Credit growth slowed to 8% YoY in October, down from 12% earlier in 2025, constraining industrial expansion.

Fiscal Policy & Government Budget

Fiscal consolidation efforts have reduced the budget deficit to 3.80% of GDP, down from 5.10% last year. However, reduced public spending on infrastructure and subsidies has tempered demand in capital-intensive sectors, indirectly affecting capacity utilization.

External Shocks & Geopolitical Risks

Ongoing geopolitical tensions in the Eastern Mediterranean and supply chain disruptions from regional conflicts have pressured export volumes. The Turkish economy’s exposure to volatile energy prices and trade partners’ slowdowns further complicates capacity utilization trends.

Comparing the current print to historical data, the November reading is 0.90 percentage points lower than the 2024 peak of 75.30% and 1.50 points below the 2019 pre-pandemic average of 75.90%. This gap highlights persistent underutilization amid structural challenges such as inflationary pressures and currency volatility.

Market lens

Immediate reaction: The Turkish lira strengthened 0.30% against the US dollar within the first hour post-release, while 2-year government bond yields fell by 7 basis points. The BIST 100 index rallied 0.50%, reflecting improved investor sentiment on industrial stability.

Looking ahead, Turkey’s capacity utilization trajectory depends on multiple macro factors. We outline three scenarios with assigned probabilities based on current data and policy signals.

Bullish Scenario (30%)

• Inflation moderates below 20% by mid-2026, enabling monetary easing.
• Improved geopolitical stability boosts exports and supply chains.
• Fiscal stimulus targets infrastructure and manufacturing upgrades.
• Capacity utilization rises above 75.50% by Q3 2026.

Base Scenario (50%)

• Inflation remains sticky around 25%, limiting rate cuts.
• External demand grows modestly but unevenly.
• Fiscal policy remains neutral with gradual deficit reduction.
• Capacity utilization stabilizes near 74.50%-75% through 2026.

Bearish Scenario (20%)

• Geopolitical tensions escalate, disrupting trade.
• Inflation spikes above 40%, forcing further tightening.
• Fiscal austerity deepens, curbing investment.
• Capacity utilization falls below 73%, risking recessionary pressures.

Overall, the base case reflects a cautious but stable industrial outlook. Upside depends on policy flexibility and external environment improvements, while downside risks stem from inflation persistence and geopolitical shocks.

Turkey’s November 2025 capacity utilization reading of 74.40% signals a modest recovery in industrial activity amid complex macroeconomic conditions. While the rate remains below historical highs, it reflects resilience against inflationary pressures and geopolitical risks. Monetary and fiscal policies will be critical in shaping the medium-term trajectory, with potential for both upside and downside outcomes.

Investors and policymakers should monitor inflation trends, credit conditions, and external developments closely. Capacity utilization remains a vital leading indicator for Turkey’s growth prospects and inflationary dynamics.

Key Markets Likely to React to Capacity Utilization

Capacity utilization data often influence Turkish equities, currency, and bond markets. The industrial sector’s health affects corporate earnings and investor sentiment, while utilization rates guide central bank policy expectations. Key tradable symbols with historical sensitivity to this indicator include:

• BIST100 – Turkey’s main equity index, closely tied to industrial output.
• TRYUSD – Turkish lira vs. US dollar, sensitive to economic fundamentals and policy shifts.
• ASELS – A leading defense and industrial stock, reflecting manufacturing trends.
• BTCUSD – Bitcoin, often a risk sentiment proxy impacted by emerging market stability.
• EURTRY – Euro vs. Turkish lira, reflecting cross-border trade and capital flows.

FAQs

What is Turkey’s current capacity utilization rate?

Turkey’s capacity utilization rate for November 2025 is 74.40%, up from 74.20% in October.

How does capacity utilization affect Turkey’s economy?

It reflects industrial sector health, influencing growth, inflation, and monetary policy decisions.

What are the risks to Turkey’s capacity utilization outlook?

Risks include inflation persistence, geopolitical tensions, and tighter financial conditions.

Takeaway: Turkey’s capacity utilization shows tentative recovery but remains vulnerable. Balanced policies and external stability are essential for sustained growth.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.