The first conclusion these figures lead us to is that industrial production did not slow down in November 2011.

Industrial production figures for November were announced. Industry had dropped steeply during late 2008 and the first half of 2009, the periods when the impact of the global crisis were the severest. After that period, industrial production picked up rapidly starting with early 2011. Between December 2009 and February 2011, industrial production expanded year-on-year by 14 .4 percent on average. Since March, annual growth rates have been lower: 8.1 percent on average for the period between March 2011 and November 2011. Industrial production growth in November was 8.4 percent, close to the March-November average. The figure below shows the annual percentage change in industrial production and average industrial growth rates. 

No slowdown

The first conclusion these figures lead us to is that industrial production did not slow down in November 2011. The trend that has been observed since March 2011 (approximately 8 percent growth) remained stable. In addition, data on a seasonally and working-day adjusted basis also needs to be considered. In November 2011, seasonally and working-day adjusted industrial production shrank month-on-month by 2.5 percent. So, does this signal a slowdown?

To answer this question, we need to examine the trend of the seasonally and working-day adjusted series, which figure 2 shows. The dotted curve shows the index while the red curve shows quarterly movements in order to reflect short term trends. The drop in November was not a first. Similar slumps were observed throughout the first half of 2011, except January.  In fact, the figure shows that the red curve showing the short-term trend (quarterly averages) heads upwards though slightly. Therefore, the answer would be no. For now, there is no slowdown in industrial production. I said for now because the drop in production might prevail and cause a downwards trend. 

Can it, really?
By the end of December, I stated my expectations for growth performance in 2012. I said I expect the 2012 growth stand between 1 and 3 percent. The rationale was mainly related to Europe as you might remember. First, European banks could introduce a large-scale credit downsizing. Second, European economies were expected to contract. These implied that Turkish firms would access lower amounts of funds and exports to Europe would shrink, respectively. Let me remind that these are only possibilities.

If these possibilities prove correct, a sharp downwards trend would be observed in industrial production. I hope they turn out to be wrong so that growth rate goes beyond my expectations.

This commentary was published in Radikal daily on 10.01.2012