Turkey's industrial production data point at slowdown
ISTANBUL - Hürriyet Daily News
Tobacco products take the lead in manufacturing industry with 27.3 increase in production.The industrial production index for March was up 2.4 percent, while the calendar-adjusted figure was a little higher at 2.5 percent over the same month a year earlier, according to a Turkish Statistical Institute (TÜİK) report published yesterday. Both base effect and a slowdown in the main trend affected the outcome, according to an analyst, as the index was up 10.6 percent annually in March 2011.
In February the annual industrial production index had been up by 4.4 percent, while on a monthly basis it had dropped by 1.4 percent.
Compared to February the index increased by 10.7 percent, but the rate of increase drops sharply to 0.7 when adjusted for calendar seasonal effects, after which it is the same as the February figure.
Improvement in intermediary goods manufacturing and both in durable and non-durable consumer goods manufacturing has gathered pace, said Nilüfer Sezgin, chief economist at Ekspres Invest, in a note to investors.
“In fact improvement is somewhat fast except in the area of capital goods. The base effect may explain why the annual figure has remained low. Because the annual increase figure for the same month last year was high, and this year [the economy has started to slow a little], annual change appears low,” she said.
“One cannot say the seasonally adjusted figure of 0.7 percent is high, exactly. In short, both the base effect and the slowdown in the main trend are significant.”
Highest monthly figures
Industry Minister Nihat Ergün said March’s industrial growth data represented the highest monthly figures in a series beginning in 2005. “Looking at the industrial production index figures and other parameters, we can see that we will meet the growth target of the Medium-Term Program.”
“At the subsector level of industry, the Mining and Quarrying Index increased by 4.3 percent, the Manufacturing Index increased by 1.6 percent and the Electricity, Gas, Steam and Air Conditioning Supply Index increased by 7.9 percent in March 2012, compared to the same month in the previous year,” TÜİK said in its March report. Tobacco products manufacturing took the lead among subsectors of the manufacturing industry with a 27.3 percent increase. The energy industry registered the highest annual increase among the main industrial sectors with 4.5 percent, as it did the previous month, but the rate was 11.4 percent in February. The energy industry was followed by consumer non-durables with 3.9 percent, durable consumer goods manufacturing with 2.9 percent and intermediate goods imports with 2.7 percent, while capital goods manufacturing decreased by 2.4 percent.
“The sharp drop in January [in the industrial production index] is now picking up. Exports supported industrial production; otherwise domestic demand in the first quarter was weak. We can say the economy is on the edge of meeting the 4 percent annual growth target. If exports contract in April and the contraction continues, things may get difficult,” said Haluk Bürümcekçi, the chief economist of EFG in Istanbul.