Industrial production falls

Bloomberg

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Industrial output fell 5.5 percent from the same month last year after declining a revised 4.1 percent in August, the Ankara-based Turkish Statistical Institute, or TÜİK, said on its Web site yesterday. Output was expected to decrease 1.7 percent, according to the median estimate of 11 economists surveyed by Bloomberg.

It is the first time in more than six years that Turkey has posted two consecutive months of falling output and the biggest single decline since February 2002. The economy grew 1.9 percent in the second quarter, its slowest pace since a 2001 recession, and the global crisis will further curb growth into 2009, Finance Minister Kemal Unakıtan said Oct. 23.

"It is a very steep fall and it confirms what we've been hearing from a range of industries,'' said Haluk Bürümcekçi, chief economist at Fortis Bank in Istanbul. "Growth is going to be very weak into next year."

Manufacturing fell 6.4 percent in September, TÜİK said yesterday. Mining declined 4.3 percent while electricity, gas and water production rose 1.6 percent.

Passenger car sales in September fell 2.5 percent from a year earlier, the third consecutive decline, and sales of vans and light commercial vehicles slumped 10.8 percent.

Suspending production
Toyota Motor Corp. said in September it was suspending production at its Turkey plant for two weeks because of lower demand in Western Europe. On Sept. 23, Tofaş, which makes Fiat cars, announced a six-day pause.

Ford Otosan, Ford Motor Co.'s unit in Turkey, said today it would stop production at its plants in northwest Turkey for 14 days this month. It said the pause was because of a decline in domestic and international markets.

"It is inevitable that we'll see a contraction in output in the fourth quarter and it'll remain weak in the first half of 2009,'' said Şengül Dağdeviren, chief economist at ING Bank in Istanbul. "The automotive sector in particular is crucial."

The Central Bank has kept its benchmark interest rate at 16.75 percent, more than four times the level in the euro zone, for the past three months.