Turkey’s industrial output expanded for the fourth straight month in January, data from national statistics office TUIK showed on March 8

The calendar-adjusted industrial production index increased by 2.6% y/y in January, slightly ahead of the market consensus forecast for a 2.3% gain.

The January data suggested that a mild recovery in economic activity may be getting under way. The government forecasts that the country’s economy, which contracted for the first time in seven years in the third quarter of 2016, will grow by 4.4% this year and that the expansion will pick up to 5% in 2018.

Economic activity may gain further momentum after the April 16 referendum on switching to an executive presidential system with sweeping powers. Once done with, the popular vote will remove a major political uncertainty if the ruling AKP gets what it wants.

On an unadjusted basis, industrial output rose by 4.2% y/y, accelerating from the previous month’s 1.3% y/y rise.

The country’s industrial production growth slowed to 1.8% last year from 3% in 2015 and the output increase was just 1.3% y/y in December.

TUIK reported that manufacturing production, on a calendar-adjusted basis, increased by 2.8% in January from the same month last year. Mining output tumbled 13.7% y/y but energy output rose by 6.9% y/y.

Durable consumer goods production advanced 1.8% annually while output in the capital goods industry increased by 13% y/y. Intermediate goods production contracted by 3.5% annually in the month.

Fitch Ratings said earlier this week that Turkey’s economic recovery would be modest with GDP growth remaining below 3% this year and next.

Calendar-adjusted Industrial Production Growth by Main Industrial Groups (y/y, %)
	Jul	Aug	Sep	Oct	Nov	Dec	2016	Jan
Total Industry	-4.3	2.0	-2.9	2.2	2.6	1.6	1.8	2.6
Intermediate Goods	-5.0	1.2	-1.4	0.4	-0.5	-3.7	0.3	-3.5
Durable Consumer Goods	-16.3	1.3	-9.4	-9.5	0.0	-5.4	-3.2	1.8
Non-durable Consumer Goods	-4.5	6.2	-6.4	4.1	0.8	6.7	3.1	1.2
Energy	2.6	4.6	0.1	5.7	8.2	3.2	4.8	6.9
Capital Goods	-6.0	-4.4	-2.1	3.8	7.3	5.0	2.1	13.0
Source: tuik