November 2017 figures showed strong gains in industrial production, year ahead looks solid

Dünya Executive - - COMMENTARY -

TIndustria­l production increased by 6.9 percent in November compared to a year earlier, an increase of 0.3 percent, according to the unadjusted index. After seasonal adjustment­s, it reached 7 percent. Yearly production over the first 11 months of last year was up 6.1 percent compared to 2016, in unadjusted terms. The increase in annual production reached 5.7 percent as of November, with a first quarter increase of 1.7 percent, a second quarter rise of 2.1 percent, and a 13.7 percent jump in Q3. In the first two months of Q4, industrial production rose by 8 percent compared to 2016.

Not just the base effect

Last year is shaping up to be the best period of industrial production for the last six years. Both the production increase in the first eleven months of 2017 and the annual production increase calculated in November stand out as the highest pace since 2011. So it is not fair to explain all the positive economic outcomes in 2017 with the base effect, keeping in mind that the base year for industrial production is 2010 and that production in 2010 is accepted as 100. The base effect is indeed an important factor that the economy slowed down in 2016, and even contracted in the third quarter, but with the industrial production increases it is also true that the best performanc­e of 2012-2017 was 2017.

ncrease to exceed 6 percent

Industrial production rose by 6.1 percent in the first eleven months and the annual increase as of November reached 5.7 percent. The increase for the whole 2017 will easily reach 6 percent, even if the increase in December drops to 5 percent. The industrial production index is expected to approach 150 in December and to break the record of 146.4 in October, meaning the annual production increase will approach 6.5 percent.

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