BY ALAATTIN AKTAS
Steps were taken so that the wheels turning in the manufacturing industry and production didn’t grind to a halt, so that employment didn’t decline (it is increasing), and so that growth could continue. To ensure this, the policy rate has been cut for the last year, knowing this would cause inflation. On the one hand, the government said that they fought inflation, while they turned their backs to it in reality.
We can’t say that this choice, which focuses on growth, production, and employment hasn’t worked at all. But high inflation has started to punish, crush, and destroy everything. The production surge in the manufacturing industry has almost stopped.
The latest data announced by the Turkish Statistical Institute shows that the slowdown in the manufacturing industry has become quite significant. Industrial production just rose by 0.4% in September, compared to the previous year, according to the unadjusted raw index and calendar-adjusted index. This indicates the lowest increase recorded this year. A surge below 1% has not been seen previously this year. The change in line with the calendar-adjusted index has also been on a downward course since April. This decline became significant, especially in the third quarter (Q3).
So, the change in industrial production compared to last year seems like it will turn negative in the last quarter of the year (Q4) if the slowdown trend continues.
The course in electricity consumption also shows that production will decline.
Although the seasonally and calendar-adjusted change in industrial production that is measured compared to the previous month is on a fluctuant course, the general tendency is downward.
Moreover, the seasonally and calendar-adjusted index fell below 140 twice this year, in July and September. So, the problem in Q3 deepened and is revealing itself with the change in the monthly index.
The business world is also uncomfortable with the way things are headed, according to a survey conducted by daily DUNYA.
The problem is obvious: there is a slowdown in orders and concern about recession. This survey included only Q3 2022. The situation is now even wore.
A survey covering Q4 would reveal that the discomfort has deepened. It seems unnecessary to conduct such a comprehensive survey. The situation will reveal itself as long as industrial production data is released.
Meanwhile, Q3 growth data will be announced on November 30. Let’s see what kind of rate we’ll see in Q3 after a 7.5% growth in Q1 and 7.6% growth in Q2.