Turkish industrial production continues improvement

Seasonal and calendar-adjusted Turkish industrial production index has swiftly recovered as lockdowns have eased maintaining growth in August and reaching an all-time high level at 3.4% month-on-month.

The reopening of the economy isn't the only reason for this, but large credit expansion along with other stimulus measures have contributed to this performance. In year-on-year terms, calendar-adjusted industrial production was up by 10.4% - the highest figure since early 2018.

In year-on-year terms, calendar-adjusted industrial production was up by 10.4% - the highest figure since early 2018

Despite the strong headline, the sectoral breakdown shows that the impact across sectors varies. A number of sectors with relatively bigger shares have already reached record highs i.e. food, chemicals, pharmaceuticals, rubber and plastics, machinery and equipment, while others have exceeded the levels before the pandemic. This shows that the recovery is strong and captures a large portion of manufacturing. However, there are also some major sectors, namely beverages, leather, wearing apparel lagging behind their pre-pandemic levels.

Regarding broad economic categories, all are now above the levels seen in early 2020 before the pandemic. Also, they are close to or at an all-time high with the exception of durable consumer goods, most likely due to challenges in adapting Covid-19 conditions as well as weak demand factors.