Industrial production contracted in August, showing the worst performance in the last 31 months. According to the Turkish Statistics Institute (TurkStat), industrial output plunged 4 percent in August. Instrumental in the August slump was the 5.7 percent dive in the manufacturing sector, affecting almost all manufacturing sub-sectors. Covering 2,005 major industrial products, the monthly industrial production index -- with 1997 as a base year -- fell by 4 percent in August to 141.2 compared to the previous month. On the previous month, the manufacturing index dropped 5.7 percent, from 142.4 to 134.3. Mining output increased by 8.5 percent, bringing the mining index up from 130.1 to 141.2.
The index reflecting production levels in utilities rose by 3.6 percent from 206.8 to 214.2.
Impacted by the August slump, production growth over the first eight months of the year declined to 3.6 percent. The industrial production index rose from 148.1 to 143 in the January-August period of 2007. In the same period in 2007 the mining index rose by 8.9 percent to 115.9, the manufacturing index by 3 percent to 145.2 and the energy index by 6.7 percent to 198.
After a fall of 5.2 percent in January, industrial production experienced the largest plunge in the past year. Industrial output had previously fallen in December 2007.
The August production slump was felt almost across the board in the manufacturing industry. In some manufacturing sub-sectors the plunge was particularly severe. Compared to the same period last year, production contracted by 56.6 percent in office and data processing machines. Production falls for the communications and textile industries were 36.8 and 21.3 percent, respectively. Manufacturers of medical, optical and precision instruments cut output by 18.7 percent. The output dive was as deep as 16.8 percent in electric machinery, 16.4 percent in vehicles and 13 percent in clothing.
A fall of 9.9 percent was seen in leather products, 8.9 percent in vehicles, 6.5 percent in chemicals, 6 percent in printing and publishing and 4.2 percent in foodstuffs. Similarly, output was reduced by 1.9 percent in the wood-cork industry and 1 percent in non-metallic minerals.
Only five of the various manufacturing sub-sectors increased output in August. The biggest boost -- 15.6 percent -- was achieved in the plastics and rubber industry. While the output of paper and paper products grew by 4.6 percent, TurkStat calculated the production increase in the coke and oil refining industry at 3.2 percent. The basic metal industry increased production by 1.9 percent and the furniture industry by 1.4 percent.
Given all these developments, it is unlikely to expect any revival in the year-end gross domestic product (GDP). Moreover, it is realistic to expect a loss of impetus in export performance due to the loss of momentum in industrial production.
