Is industrial production really increasing?
TurkStat released two rates of change relating to industrial production. One of these is the calendar-adjusted index and the annual rate of change on this index. The other is the calendar- and seasonally-adjusted index and the monthly change on it.
There is another one, not released by TurkStat: the non-adjusted index. The other indices show the ‘as it was the same number of days’ assumption and “if there were no seasonal impact” as
sumption. But the non-adjusted index is the plainest index that shows how much was produced.
Which index indicates what?
According to the statement made by TurkStat last week, the calendar-adjusted index shows that industrial production in March decreased by 2.2 percent year-on-year. According to the seasonally- and calendar-adjusted index, it represented a 2.1 percent increase month-on-month. So, in March you don’t get any trouble saying either ‘production decreased’ or ‘production increased’. Both rates are true.
But in our opinion, the most accurate index is the unadjusted index with no additives. According to this unadjusted index, industrial production in March remained below 4.7 percent of the same month last year. For us, this is the most accurate rate of change.
The worst in ten years
The monthly change in industrial production gives an insight about where you are heading but to see the course in general, it is best to consider a longer period of time. When you evaluate production on a quarterly basis, production decreased by 5.7 percent year-on-year, indicating the worst performance of the last decade. First quarter production increased by 9.3 annually last year.
Industrial production fell by 22.1 percent in the first quarter of 2009. And before that, in 2001- another crisis year - fell by 0.9 percent. They were the time of crisis and it was normal in a sense. But how will we define 2019?