Falling exports was the main factor behind weakening industrial sector
According to calendar and seasonally adjusted Turkstat data, industrial production rose 3.4% m/m in August following 8.48% rise in July. The main factor behind weakening is a 4.63% decline in durable consumer goods production in the same period.
Besides, declining exports by 17% in August also explains momentum lost in industrial production. According to the TİM figures, industrial goods exports fell by 18% in August. In detail, Vehicles and Sub-Industry exports and Iron and Steel exports fell by 30% and 16% in August, respectively. Moreover, declining in leading exports sectors of textile and chemicals suggests deterioration in nondurables production.
Retail sales partly supported the industrial production in August
According to calendar and seasonally adjusted Turkstat figures, retail sales increased by 1.4% m/m in August. Food and automotive fuel excluded sales rose by 4.5% while food, beverage, and tobacco sales shrank by 3.7% in the same month. Furthermore, textile, clothing and footwear sales soared by 12.7% thanks to the discount season. On the other hand, electrical goods, and furniture sales narrowed by 4.8% in August stemming from jumping consumer loan rates from 13% to 17% levels.
Industrial production may perform better in September
Calendar and seasonally adjusted SAMEKS Industrial Sector Index weakened slightly in September, and a similar weakness was also seen in ISO manufacturing sector PMI figures. TİM exports figures, on the other hand, pointed to a 30.5% increase in September. Considering the figures mentioned above, we may say that industrial production may perform better in September compared to the August figures.
Industrial sector will support the employment in August, but the outlook is unfavorable for September
According to seasonally adjusted labor force statistics, unemployment rate realized as 13.6% in the period of July 2020 down by 0.5 percentage point the previous period.
Considering both retail sales and SAMEKS Services Index in August, employment in the services sector does not point out any favorable outlook, while this is not the case for the September figures.
On the other hand, SAMEKS Industrial Sector figures indicate speeding in recruitment in August signaling improvement in employment outlook in the sector. However, September SAMEKS figures points to a discouraging employment outlook.
Fulya Gürbüz, Ph.D.