Turkey: Industrial production continues its strong upward trend

According to calendar adjusted data, Turkey’s industrial production in October increased by 10.2% compared to the same month of the previous year; Seasonal and calendar adjusted industrial production increased by 1.1% compared to the previous month.

According to unadjusted data, industrial production increased by 9.4% compared to the same period of the previous year. Our forecast was that industrial production increased by 10.1% on an annual basis in October with adjusted data.


After the decrease in production in the April-May closing period, it is seen that the strong increase momentum continues as of the period starting with June and July. Particularly in 3Q20, when demand was strong, this situation had reflections in automotive, white goods and many other sectors. Demand conditions abroad also contributed positively with the recovery effect in the said period. The momentum achieved on the industry side in the 3Q20 period continues. Although the effect of the shutdowns brought along some measures in the working order of the factories, activity was maintained in the production line in general.


When we look at the details; While mining and quarrying decreased by 0.6% on a monthly basis, it increased by 0.4% on an annual basis. While there was an increase of 1.4% on a monthly basis in the manufacturing industry, there was an 11% growth on an annual basis. In the electricity, gas and steam group, there was a contraction of 2.5% on a monthly basis, and an increase of 5.5% on an annual basis. On a monthly basis, durable consumer goods increased by 4.8%, non-durable consumer goods by 2% and intermediate goods by 1.7%. Energy contracted by 1.5% and capital goods by 1.3% on a monthly basis. Considering the annual changes in the related items; Durable consumer goods increased by 21%, intermediate goods by 12.1%, capital goods by 10.4%, non-durable consumer goods by 8.1% and energy by 1.2%.


The current momentum in industrial production can be maintained. Certain sectors have been affected by the pandemic and continue to be affected within the framework of current shutdown measures. The overall impact of restrictions is felt mostly on the service sector side, particularly restaurants and tourism. On the industrial side, the activity continues with the effect of being excluded from the scope in order not to interrupt production activities. We will look to see if the momentum in the industry will continue as clearer data become available on the effects of the pandemic and the extent of the measures. There are risks on the demand side, now both the limitation of domestic demand and the impact of the shutdown measures abroad pose a risk. All over the world, there are vaccine expectations. Raw material prices have risen from the exchange effect inside, and there is an increase in prices in the world with vaccine hopes and expectations for improvement. Vaccination, economic incentives, normalization and its economic recovery effect will be determining factors in terms of growth momentum. While we expect to close the year 2020 with a growth rate close to 0, an economic growth of around 4% can be expected in 2021 in a scenario where the risks regarding the epidemic do not increase.


Kaynak Tera Yatırım
Hibya Haber Ajansı