ANKARA
Turkish industrial production increased 1.7 percent in February from the previous month, and 1 percent from the same period in the previous year, the Turkish Statistical Institute said in a statement Wednesday.
"Industrial production growth at 1 percent over previous year was stronger than market expectations. Market consensus was around 0.2 percent," commented Ozlem Derici, chief economist of DenizInvest.
The increase comes after a 2.2 percent drop in industrial production in January, but analysts attributed that fall in part to harsh winter weather.
According to the statement, the largest increase was in the manufacture of basic pharmaceutical products and pharmaceutical preparations by 10 percent from January.
Next was the manufacture of furniture, up 8.1 percent, and the manufacture of electrical equipment, increasing 7.2 percent in February 2015, compared with the previous month.
"High-frequency indicators, such as business and consumer confidence and industrial production, point to a recovery in domestic demand. A weaker currency – despite some more recent appreciation – combined with a pick-up in export market growth should support exports, help rebalance the economy and narrow the current account deficit," the Organization for Economic Cooperation and Development said in its last report on Turkey released in December 2014.
Mining and quarrying improved 5.8 percent, manufacturing increased 1.7 percent and electricity, gas, steam and air conditioning supply rose 0.3 percent in February 2015, compared with the previous month.
Durable consumer goods showed an important 6.6 percent jump in February of 2015, compared with the previous month.
But transport equipment production dropped 11.7 percent from the previous month, the statement added.
"The good news is capital goods production," Derici continued. "It was 8.5 percent higher than previous year. It is good news for future investments. We considers capital goods as a leading indicator for future investment performance. So it is good to have such a strong number for the capital goods group."
But Derici warned that manufacturing growth was not yet sustainable. "Indusrial production generated a 2.2 percent decline in January. And together with this one percent in February it does not point to strong GDP growth for the first quarter of the year."
Turkey’s government unveiled a plan to revive investment and create 120,000 new jobs on April 2 to help boost economic growth.
The 7.5 billion lira ($2.9 billion) package unveiled by Prime Minister Ahmet Davutoglu includes a job-training program, insurance-premium contributions by the state, additional tax breaks for investments and Treasury guarantees for business loans.
