Turkey’s adjusted industrial turnover growth slows slightly to 26% y/y in May

Turkey’s adjusted industrial turnover growth slows slightly to 26% y/y in May
Rising export demand along with the depreciation of the Turkish lira and government stimulation measures have been the main drivers of Turkey's improved industrial production performance / bne IntelliNews
By bne IntelliNews July 13, 2017

Turkey’s seasonally-adjusted industrial turnover index rose by 26% y/y in May after reaching a peak point of 30% y/y in Aprilthe statistics institute TUIK said on July 13.

The index last went through an annual contraction in September last year - declining 1.2% - when the industrial production index also posted its last annual decline – measuring 2.9%. Both indices have been on an upward path since that month, despite a temporary reverse in February.

Turkey's growth in industrial output began its latest period of acceleration in March. Rising export demand in parallel with the depreciation of the Turkish lira, as well as government stimulation measures put in place before the April 16 referendum on the executive presidency, have been the main drivers behind the improved industrial production performance.

Turnover growth has been escalating at a higher pace than production, mainly due to rising inflation.

On a seasonally and calendar-adjusted basis, the industrial turnover index contracted by 0.9% m/m in May, after rising by 2% m/m in April, TUIK data also showed on July 13.

Initial indicators point to the robust performance having continued through June.

Turkey's Manufacturing Purchasing Managers' Index (PMI) advanced further from 53.5 in May to 54.7 in June, reaching the highest level recorded since November 2013.

Turkey’s business confidence index rose 3% m/m to 112.4 in June, the highest level recorded since May 2014 when it was 113.5. The capacity utilisation rate (CUR) of Turkish manufacturing rose further to 79% in June, the highest figure recorded since August 2008’s 81.9%.

The capacity utilisation rate (CUR) of the Turkish manufacturing sector rose to 78.8% in May, the highest figure recorded since August 2013.

Leading indicators hint at a strengthening economic recovery in the second quarter, the central bank said on June 22 in the minutes of its latest Monetary Policy Committee (MPC) meeting

GDP growth accelerated to 5% y/y in the first quarter of this year from the 3.5% y/y expansion recorded in the previous quarter and the 1.3% y/y contraction posted for the quarter before that. The indicators suggest that Turkey’s economic growth will be stronger in the second quarter than it was in the first, Deputy PM Mehmet Simsek noted on June 12, commenting on the latest GDP data

Production of the industrial sector, which rose 5% y/y in Q4, was up 5.3% y/y in Q1 while manufacturing output rose by 5.1% y/y after growing 4.4% y/y in Q4, according to the latest GDP data.

CPI inflation in June eased to 10.90% from 11.72% in May.

Data

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