ECONOMY BRIEF:  November  payroll, industrial production data point to  contraction in economic activity

According to official stats agency Turkstat data, the unemployment rate increased by 0.4 points in November to reach 9 percent in seasonally adjusted terms. While the unemployment rate in the young population was 16.5 percent, broadly defined unemployment increased by 1.3 points compared to the previous month, rising to 22.7 percent. Thus, unemployment increased for the first time since June.

 

Industrial production declines sharply on Y/Y basis

While industrial production in Turkey decreased by 1.4 percent in November compared to the previous month, it increased by 0.2 percent compared to the same month of the previous year. The monthly contraction series increased to the 5th month and was the longest series since 2018.

On an annual basis, in November, the mining and quarrying sector index decreased by 4.5 percent, the manufacturing industry index decreased by 1.3 percent and the electricity, gas, steam and air conditioning production and distribution sector index decreased by 1 percent compared to the previous month.

Commentary

Unemployment is expected to increase throughout the winter months, while a recovery in industrial production will have to await stronger data from the European economy.  Businesses are shedding labor as external demand declines. The domestic demand is still perceived as strong, judging by shopping center turnover data  rising by 92% Y/Y, which is inflationary.

 

Turkish GDP will have most likely registered a small contraction Q/Q in 4Q2023. However, the 50% across-the-board hike for minimum wage and civil service salary and wages ought to boost domestic demand in 1Q2024.

 

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Published By: Atilla Yeşilada

GlobalSource Partners’ Turkey Country Analyst Atilla Yesilada is the country’s leading political analyst and commentator. He is known throughout the finance and political science world for his thorough and outspoken coverage of Turkey’s political and financial developments. In addition to his extensive writing schedule, he is often called upon to provide his political expertise on major radio and television channels. Based in Istanbul, Atilla is co-founder of the information platform Istanbul Analytics and is one of GlobalSource’s local partners in Turkey. In addition to his consulting work and speaking engagements throughout the US, Europe and the Middle East, he writes regular columns for Turkey’s leading financial websites VATAN and www.paraanaliz.com and has contributed to the financial daily Referans and the liberal daily Radikal.