Turkey’s calendar adjusted industrial production falls 2.2% y/y in January

By bne IntelliNews March 9, 2015

The calendar adjusted industrial production index fell 2.2% y/y in January but the markets had expected a 1.6% y/y increase. This was the first y/y decline recorded on a calendar-adjusted basis since December 2012 when the industrial production index fell by a comparatively limited 0.8% y/y. The index rose 2.5% y/y in December 2014.

According to data of the statistics institute TUIK, on a calendar adjusted basis, intermediate goods output slumped by 8.2% y/y in January after rising 0.2% y/y in December while the production increase in the durable consumer goods industry slowed to 0.7% y/y from 2.6% y/y.  Capital goods output that grew 8% y/y in December increased by another 7.2% in January. Manufacturing production contracted 2.4% y/y after rising 2.7% y/y in December while utilities industry’s output increased 2.9% y/y following a 0.1% y/y decline.

The unadjusted industrial production index fell 2.3% y/y in January (market consensus forecast: 1.5% y/y increase) versus 4.4% y/y increase in the previous month. On unadjusted basis, manufacturing output declined 2.5% y/y, intermediate goods production fell 8% y/y, durable goods output rose 0.5% y/y, energy increased 1.5% y/y and TUIK reported a 7% y/y production increase for the capital goods industry.

The January data suggest that Turkey’s industry sector has made a weak start to the first quarter of 2015. The latest export and PMI data are also not very encouraging. Turkish manufacturing PMI survey signalled an on-going modest deterioration in business conditions, said Markit on March 2, noting that the headline Manufacturing PMI registered below the no-change mark for the second straight month in February, and fell slightly to 49.6 from 49.8 in January. The Turkish Exporters’ Assembly (TIM) reported that exports plunged 13% y/y in February that came on a 9.8% y/y decline in January. The government targets a 3.3% GDP growth for 2014 and 4% expansion for 2015. However, given recent data pointing to a weak economic activity, economists think the 2014 growth may be below 3% and they now question whether the government’s 2015 target is within reach, according to Reuters.

Industrial Production by main Industrial Groups (January)    
(%) Calendar Adjusted Seasonally & Calendar Adjusted
  (y/y) (m/m)
Total Industry -2.2 -1.4
Intermediate Goods -8.2 -2.7
Durable Consumer Goods 0.7 -5.0
Non-durable Consumer Goods -2.4 -2.0
Energy 1.7 1.1
Capital Goods 7.2 0.8
Source: tuik

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