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Economy in Brief

Turkish Industrial Production Pauses after Earlier Surge; National Economy Expanding and Diversifying
by Carol Stone June 8, 2007

Industrial production in Turkey has declined in the last two reported months, but those follow a very strong performance in February. In total, IP dropped 1.9% and 3.4% in April and March, respectively, while it surged 6.4% in February. Total manufacturing output fell 3.0% in April and 3.9% in March, but February was up 7.5%. These are all month-to-month figures, seasonally adjusted by Haver Analytics. Data on Turkey are included in Haver's EMERGEMA database, with the Middle Eastern and African nations.

As is evident from just the moves in the totals, Turkish industry behavior is not very smooth. Even the mature textile sector -- from the traditional rugs to high fashion, for instance -- has been growing recently, but fell hard in 2005. Newer sectors are more erratic still. Machinery production was down 2.8% in April and 13.1% in March, but it had surged by 22% during 2006.

This said, the economy is a diverse one, with the traditional textiles now joined by a wide array of other sectors. Metals and machinery are notable as well as automobile production. Indeed, the auto and truck output have expanded rapidly, with a pace now of about 50,000 cars monthly and 30,000 trucks. The truck figures rival Germany and France and exceed the UK. [Those countries' auto and truck output volumes are in Haver's G10+ database.] The diversity, of course, helps limit the lurches in total industrial production as strength in one sector can balance weakness elsewhere. And the Turkish economy as a whole is moving ahead. Its US-dollar equivalent GDP in 2000 prices was as large last year as those of Austria, Belgium and Switzerland and it is rapidly gaining on Sweden, all much more established. Of course, the standard of living of the average Turk remains a mere fraction of Belgians, Austrians and Swiss. But the growth is encouraging.

TURKEY Industrial Production
( % Change)
Apr 2007* Mar 2007* Feb 2007* 2006 2005 2004 2000- 2003
Total Industry -1.9 -3.4 6.4 5.8 5.4 9.8 2.8
Manufacturing -3.0 -3.9 7.5 5.5 4.8 10.4 3.2
Textiles 3.0 2.0 9.4 -1.1 -11.8 -1.5 2.9
Basic Metals 1.6 -1.0 3.9 10.7 3.4 11.6 5.4
Machinery -2.8 -13.1 4.4 22.0 1.2 31.0 5.7
Motor Vehicles -3.0 -10.3 5.2 9.7 9.6 53.3 0.9
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