Turkish production growth turns negative in April

The industrial production index which increased for three straight months in Q1 turned negative in April, recording a -1.0% month on month contraction. The data, likely showing the impact of the renewed volatility in markets, proved the fragility of the recovery in economic activity seen in Q1.

The manufacturing and mining sector stood out as the major drivers of the contraction, contributing -0.8ppt and -0.4ppt to the headline, respectively, while the contribution of utilities was slightly positive. Among the manufacturing sectors, automotive and other non-metallic mineral products were the worst performers, providing -0.3ppt drag to the seasonally adjusted manufacturing performance, while food products and basic metals lifted the manufacturing production by +0.2ppt.

Given that only slightly higher than a third of 24 manufacturing-related sectors record production increases in April - the lowest since October 2018, the rebound in early 2019 can be temporary. On the other hand, the industrial production (calendar adjusted) growth in April, stood at -4.0% YoY, lower than the consensus at -2.5% YoY.

In broad economic categories, undurable consumer goods and energy were the groups with positive growth rates, providing minor contributions to the April figure. Among the negative drivers, heavyweight intermediate goods pulled the monthly reading down by -0.6ppt, increasing concerns about the recovery trend, followed by capital goods and durable consumer goods dragging the sequential IP by -0.4ppt and -0.2ppt, respectively.