Turkish industrial output growth hits 20-month high in April

Turkish industrial output growth hits 20-month high in April
By bne IntelliNews June 8, 2017

Turkey’s calendar-adjusted industrial production index moved up by 6.7% y/y in April, marking the best growth in output recorded since August 2015, data from national statistics office TUIK showed on June 8.

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

Initial indicators point to the robust performance having continued in May.

The seasonally-adjusted industrial production index has posted annual growth for seven consecutive months since October.

On a calendar and seasonally adjusted basis, Turkey’s industrial production expanded 2.3% m/m in April.

Manufacturing output increased by 7.3% y/y in April after registering a 2.3% y/y rise in March. Durable consumer goods production advanced 16.2% y/y in April, accelerating from the 13.1% y/y increase in the previous month, thanks to VAT cuts for the sector. Output in the non-durable consumer goods sector contracted 2.5% y/y versus the 1.5% y/y decline in March.

Energy output was up 7.5% y/y in April versus 8.6% y/y in March.

Output in the capital goods manufacturing industry rose by 25% y/y in April, jumping from 2% y/y in March while intermediate goods production increased by 2.2% y/y in April after expanding 2% y/y in the previous month.

Turkey's Manufacturing Purchasing Managers' Index (PMI) rose from 51.7 in April to 53.5 in May, the highest level recorded since December 2013. “The Turkish manufacturing sector stepped up a gear in May,” Trevor Balchin, a senior economist at IHS Markit, said in comments on the survey results.

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

Turkey’s GDP growth picked up to 3.5% y/y in the fourth quarter of 2016 after a Q3 slump of 1.3% y/y.