Industrial production signals resilience

ISTANBUL- Hürriyet Daily News

A 7.3 percent increase in Turkish industrial production in October beat forecasts by economists. AA photo

Turkish industrial production in October compared to the same month last year hit 7.3 percent, far exceeding market expectations and providing evidence of the resilience of the Turkish economy despite the global economic crisis, according to analysts.

On a month-to-month basis, industrial production rose 4.4 percent, the largest monthly increase since December 2010. The strong output figure was primarily driven by capital goods production.

According to Turkish Economy Bank (TEB) research, export-oriented sectors, such as textiles, apparel and automotive production, stayed strong despite the slowdown in the eurozone.

“Despite the sour global developments, the Turkish economy shows a significant resilience and this was mainly due to historically low interest rates and lira depreciation that supported overall export performance,” BGC Partners economist Özgür Altuğ said in an emailed note to investors.

He said the October data was important since it provided the first real macro data regarding fourth-quarter 2011 GDP growth.

Altuğ highlighted the furniture sector in particular. According to the October data, furniture production in Turkey posted a 14.3 percent year-over-year increase despite the unfavorable base in October, validating the level of domestic economic activity and success in exports, he said.
Oyak Securities economist Elif Gülay Girgin, in her note to investors, said the high industrial production outcome indicated that the economy was not experiencing the expected slowdown despite measures taken by the Turkish Central Bank to slow the economy. “It doesn’t appear that there will be a soft landing in 2012.”