Macro Snapshot: Labor Force Statistics, October 2020

Turkey’s unadjusted unemployment rate was 12.7% in October (Sep.20: 12.7%, Oct.19: 13.4%). Seasonally Adjusted unemployment increased from 12.8% in September to 12.9% in October (1st increase after 3- month long drops).

Participation rate decreased by 3pps YoY (-0.5pps MoM) to 50% and SA rate remained stable at 49.6%

Employment rate decreased by 2.3pps YoY (-0.5pps MoM) to 43.6% and SA rate decreased by 0.1pps to 43.2%

Total number of unemployed in unadjusted series decreased by 391,000 YoY (-11,000 MoM) to 4.1mn whereas it increased by 39,000 to 4mn in SA figures.

The labour force decreased by 1.3mn YoY (-272,000 MoM) to 31.5mn whereas SA figure increased by 40,000 to 31.2mn.

The employment decreased by 896,000 YoY (-260,000 MoM) to 27.4mn whereas SA figure increased by 1,000 to 27.2mn.

Total number of people who not seeking a job but available to start, therefore not included in labour
force and unemployment, was 4.3 mn.

72% of total unemployment has been unemployed for less than 1- year whereas 28% has been unemployed for more that 1-year.

The ratio of persons working without any social security relating to the main job occurred decreased by 3.9pps YoY (-1.2pps MoM) to 31% while the rate of unregistered employment in non-agricultural sector realized as 19.9% with 3.6pps YoY drop (-0.4MoM).

The youth unemployment rate between aged 15-24 years realized as 24.9% with 0.4pps YoY decrease (+0.6pps MoM) whereas SA figure increased by 0.4pps to 24.8% compared to the previous month.

The rate of neither in employment nor in education realized as 27.6% with 1.6pps increase compared with the same period of the previous year (-1.5pps MoM).

According to our calculations, the broad unemployment rate (by adding not seeking a job but available to start and seasonal workers) was 23.5% (Sep.20: 22.9%, Oct.19: 19%).

The non-agricultural unemployment rate decreased by 0.9pps YoY to 14.8% in unadjusted figures (-
0.1pps MoM), and increased by 0.1pps to 14.9% in seasonally adjusted figures

In unadjusted figures, employment ratio of males recorded a drop by 2.4pps YoY (-0.6pps MoM) to 61.1% whereas the employment ratio of females decreased by 2.3pps (-0.5pps MoM) to 26.4%.

In yearly comparison, industry and constuction sectors increased by 0.4pps and 0.5pps to 21% and 6%, respectively whereas the share of agriculture and services sector decreased by 0.3pps and 0.6pps to
17% and 56%, respectively. In SA figures, construction and service sectors started with employment losses to Q4.

Employment in agriculture sector decreased by 242,000 YoY in unadjusted figures to 4.8mn, but increased by 6,000 MoM to 4.7mn in SA figures.

Employment in industry sector decreased by 82,000 YoY in unadjusted figures to 5.6mn, but increased by 67,000 MoM to 5.6mn in SA figures

Employment in construction sector increased by 110,000 YoY in unadjusted figures to 1.7mn, but decreased by 2,000 MoM to 1.6mn in SA figures

Employment in services sector decreased by 684,000 YoY in unadjusted figures to 15.3mn, and decreased by 70,000 MoM to 15.2mn in SA figures.

Turkey has faced the negative economic effects of the pandemic when the unemployment was above
the historical averages. Despite the historical averages indicate a 0.1pps of monthly increase in the headline figure due to the seasonal factors in October, the last data remained stable in monthly basis.

Employment protective measurements and strong loan growth restricted the negative impacts of the pandemic on the employment. Our 12-month average unemployment rate estimate for 2020 at 13.4%.

After the drop out of the months of April-May, which was the worst periods of the pandemic, employment was supported by the gradual normalization steps and strong loan growth trend. On the other hand, this trend seemed halted recently due to the tightening in the financial conditions and newly curfew measurements. It should be noted that the results were published for the 36th and 48th weeks of 2020, including September, October and November.



Source: Y.F. Securities Research