Economic Overview of Turkey’s Industrial Production
In June, Turkey experienced a significant decline in industrial production, which dropped by 4.7% compared to the same month last year. This follows a modest increase of 0.1% recorded in May, according to the Turkish Statistical Institute (TÜİK). Earlier in April, the decline in industrial output was noted at 0.7% on an annual basis.
Monthly Trends and Sector Performance
On a month-to-month basis, the industrial production index rose by 2.1%, marking an improvement from the 1.8% increase witnessed in May. However, the manufacturing sector faced deeper challenges in July, as the annual decline in production accelerated sharply from 0.4% in May to a staggering 6.9%. Following a previous month where manufacturing production increased by 2%, July saw a downturn of 3.1%.
Manufacturing Sector Insights
Recent survey data painted a bleak picture for the manufacturing sector. The Istanbul Chamber of Industry’s Manufacturing Purchasing Managers’ Index (PMI) fell for the fifth consecutive month in July, dropping to 47.2 from June’s 47.9. The decline in demand has led to a reduction in new orders, which has subsequently affected both production and employment levels, according to the survey released on August 1.
Consumer Goods Production Declines
The production of durable consumer goods saw a significant annual decline of 9.1% and a monthly decrease of 5.4%, as reported by TÜİK on August 9. In the non-durable consumer goods sector, the production fell by 9% year-on-year and by 4.3% month-on-month. Additionally, the intermediate goods sector recorded a decrease of 6.1% in output compared to June of the previous year, while the capital goods sector experienced a 5.6% annual decline.
Conclusion
Overall, Turkey’s industrial production is facing notable challenges, with various sectors experiencing significant contractions. The economic outlook remains uncertain, as evidenced by the declining PMI and the sharp reductions in consumer goods production.
