Turkey’s industrial production rises 2.4% y/y in May

By bne IntelliNews July 8, 2015

On a calendar-adjusted basis, industrial production rose 2.4% y/y in May (market forecast: 1.9% y/y), after increasing 3.9% y/y (revised from the previously announced 3.8% y/y) in April, the statistics office TUIK said on July 8.

On a calendar & seasonally adjusted basis, industrial output, however, fell 2% m/m in the month.

Data from TUIK also showed that on an unadjusted basis industrial production rose 0.5% y/y (market consensus: 0.35% y/y decline) after increasing 3.9% y/y in April.

On a calendar adjusted basis, manufacturing production rose 3% y/y in May vs 4.8% y/y in April, while the output in the intermediate goods industry fell 0.5% y/y after declining 0.9% y/y. The increase in durable consumer goods output slowed to 3.1% y/y from 6.5% y/y in April. Energy posted a 5.4% y/y increase in May vs 1.5% y/y in the previous month, and capital goods output rose 1% y/y after increasing 14% y/y in April.

The better than expected industrial production in May is a good sign for the growth prospects, but the latest PMI surveyed suggested that this improvement may not continue into June. The PMI fell from 50.2 in May to 49.0 in June over political uncertainty, signalling an overall deterioration in business conditions at Turkish manufacturers.

The Turkish economy is expected to expand between 2% and 2.5% this year, falling far short of a government target of 4%, after a June election failed to produce a single-party government, government officials told Reuters on July 6.

The heightened political uncertainty, including the possibility Turkey will fail to form a coalition government and instead hold a snap election, is suppressing investment, the economy officials told the news agency.

Earlier this month, the World Bank said it downgraded its growth forecast for 2016 and 2017 to 3.5% (from a previous 3.9% and 3.7%, respectively), against the backdrop of uncertain political outlook in a gradually tightening global financial environment. The Bank, however, maintained its growth forecast at 3% for 2015.

Industrial Production by main Industrial Groups (May)    
(%) Calendar Adjusted Seasonally & Calendar Adjusted
  (y/y) (m/m)
Total Industry 2.4 -2.0
Intermediate Goods -0.5 -0.7
Durable Consumer Goods 3.1 -4.9
Non-durable Consumer Goods 6.4 -0.8
Energy 5.4 1.3
Capital Goods 1.0 -7.8
Source: tuik

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