Turkish industrial sector losing steam

Turkey’s industrial production fell for the first time since April 2020 on a month-on-month basis. Retail sales grew at a slower pace.

Industrial output dipped by 4.2 percent in July compared with June on a seasonal and calendar-adjusted basis, the Turkish Statistical Institute said on Monday On annual basis industrial production increased by 8.7% versus the expectation of +15.1%. 

Industrial production index annual change rates (%), July 2021

The drop in production was spread throughout Turkey’s industrial subsectors, aside from mining and energy. The decrease was led by a 22.4 percent decline in output of high-tech goods and a decrease of 11.6 percent in capital goods production.

Industrial production index monthly change rates (%), July 2021

The industrial production is important especialy this year as the GDP growth has rooths in export growth.  Consensus estimate for GDP growth in 2021 is at 9-10% following 2Q21 GDP growth of 21.7% anually.  On a quarterly basis, the economy grew by 0.9 percent in the second quarter.

Retail sales increased by 0.7 percent month-on-month in July. The pace of growth slowed from 15 percent in June, the institute said in a separate statement. A decline in purchases of electronic goods, computers and mobile phones pushed the growth lower.

Retail sales volume monthly rate of change (%), July 2021

Sales of goods via mail order rose by 4.3 percent and of medical goods and cosmetics by 3.2 percent, the institute said.

On an annual basis, retail sales increased by 12.3 percent after 18.1 percent growth in June.

Total turnover index  including industry, construction, trade, and services sectors decreased by 1.9% on monthly basis in July 2021.

Total turnover monthly rate of change (%), July 2021

At the detail of the total turnover index; construction increased by 2.8%, services increased by 4.3%, industry decreased by 1.8% and trade decreased by 4.2% on monthly basis in July 2021.

Turnover indices monthly rate of change (%), July 2021