Turkey’s industrial production rises 4.6 percent in October

Turkish economic outlook in fourth quarter strengthens after industrial production posts sharp increase in October

Photo by: Reuters
Photo by: Reuters

Turkish industrial production rose sharply in October, driven largely by healthy increases in manufacturing, energy and climatization sectors, according to a report from the Turkish Statistical Institute on Tuesday.

Industrial production, a measure of output in the manufacturing, utilities and mining sectors rose 4.6 percent in October from the same month in the previous year, and rose 0.1 percent in October from September, the report said.

Industrial production had risen 2.8 percent in September year-on-year.

The increase in October was driven by a jump in capital goods production which advanced11 percent year-on-year.

"German factory orders rose by 1.8 percent in October, and many Turkish exporters produce intermediary goods for German manufacturing," commented Bora Tamer Yilmaz, an economist with Ziraat Securities in Istanbul. "This helps drive up production in Turkey."

The Markit Manufacturing Purchasing Managers' Index (PMI) rose to 50.9 in November from 49.5 in the previous month. Any reading above 50 indicates expansion, while a score below 50 suggests contraction.

Domestic demand is also on the rise in Turkey, Markit said in a note on December 1, and so orders are up for local producers as well.  

There was also good performance in the manufacturing sector, up 5 percent, and a 4.1 percent advance in the electricity, gas, steam and air conditioning supply sectors, TurkStat said.

Among the subsectors, only the mining and quarrying sectors contributed negatively to the reading, slipping by 0.5 percent, according to the report.

Turkish GDP growth is projected to increase from 3 percent in 2015 to above 4 percent in 2017, as political uncertainties are assumed to fade, employment continues to rise, and the exchange rate depreciation and the gradual strengthening of global markets support export growth, the Organization for Economic Co-operation and Development said in a note on November 1.