Turkey’s unadjusted unemployment rate was 12.8% in April. There was no consensus available for the data (Mar.20: 13.2%, Apr.19: 13%). Despite the historical averages indicating a 0.9pps of monthly drop in the headline figure due to the seasonal factors in April, the last drop was 0.4pps. SA unemployment increased from 13.1% in February to 13.8% in April. Additionally, youth employment rate decreased by 0.2pps to 24.4% in unadjusted figures, but increased by 1.5pps to 26.6% in seasonally adjusted figures. It should be noted that the results were published for the 10th and 22nd weeks of 2020, including March, April and May.
Labour force, employment and unemployment continued to decrease simultaneously in April as was in February and March
The labour force decreased by 716,000 to 29.4mn, employment decreased by 519,000 to 25.6mn, and unemployment decreased by 196,000 to 3.8mn. The participation rate decreased by 1.2pps to 47.2%, while the employment rate decreased by 0.9pps to 41.1%. According to our calculations, the broad unemployment rate (by adding not seeking a job but available to start and seasonal workers) was 24.6% (Prior 23.1%).
The non-agricultural employment rate decreased by 0.1pps to 14.9% in unadjusted figures, but increased by 0.9pps to 16.1% in seasonally adjusted figures. In non-seasonally adjusted figures, employment losses were seen in all sectors, except agriculture. Ongoing sharp drops in employment in the services sector, which is 56% of total employment, deserves attention. Employment in services sector decreased by 520,000 to 14.5mn whereas the employment in the industry decreased by 164,000 to 5.3mn.
Turkey has faced the negative economic effects of the pandemic and unemployment is still above historical averages despite recent improvements before the pandemic due to the easing of financial conditions. Normally, positive seasonal effects are seen in the unemployment rate from February to mid-year. However, these potential seasonal effects could be very limited for this year due to the expected contraction due to the pandemic, and difficulties especially in the services sector. Additionally, it is still hard to predict the potential support of recent and upcoming precautions on employment. Our 12-month average unemployment rate estimate for 2020 at 15.3%.
By EROL GÜRCAN – Section Chief, YF Invest
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