MediumIV Macro Policy & Sovereign Debt9 October 2026, Friday · 10:00 TRT (UTC+3)

Turkish industrial output shrinks year on year for a fourth month

TurkStat data released on 9 October show industrial production fell 1.9% year on year and 1.0% month on month in August. Manufacturing contracted 2.5% year on year and capital goods output fell hardest, down 5.1%; only energy and mining grew.

Location: ANKARA

Bloomberg HT reported on 9 October that the annual decline has now run for four months. In the TurkStat data cited by Anka, manufacturing fell 2.5% year on year and 1.6% month on month. Mining and quarrying rose 1.7% year on year and 4.1% month on month. Electricity, gas and steam output rose 1.3% year on year and 3.3% month on month. Manufacturing is the only large component dragging the headline index down.

The main industrial groupings give a clearer picture. Dünya reported on 9 October that capital goods, meaning investment goods such as machinery and equipment, fell 5.1% year on year and 3.3% month on month. Non-durable consumer goods output fell 4.1% year on year and durable consumer goods 1.5%. Energy was the only main group to grow, up 4.4% year on year. High-technology output, by contrast, rose 14.5% year on year and 4.8% month on month.

Leading indicators show no recovery in September either. The ISO Türkiye Manufacturing PMI cited by Yatırımx fell from 48.1 to 47.9 in September. Output declined for a fourth straight month and input cost inflation hit a four-month high. According to CNBC-e, the seasonally adjusted capacity utilisation rate rose 0.6 points to 74.1% in September. The two indicators point in different directions.

Talay assessment

Bottom line

The August data show the contraction in manufacturing is a four-month trend, not a temporary blip. The 5.1% fall in capital goods suggests companies are postponing investment. September's PMI of 47.9 confirms the picture, and the 0.6-point rise in capacity utilisation is the only, and weak, support for a recovery claim. Shrinking industry curbs imports and inflation, but it also adds growth pressure ahead of the 22 October MPC meeting.

Likely effects

Rate decisionUncertainWeeks
Four straight months of contraction strengthen the growth argument for a cut at the 22 October MPC meeting; the decision still hinges on the currency and reserve constraint.
Investment and employmentNegative1–6 months
A 5.1% annual fall in capital goods output shows machinery investment being deferred and manufacturing employment staying under pressure.
External balanceUncertain1–6 months
Contracting manufacturing slows intermediate goods imports, temporarily supporting the current account as the energy bill rises.

Possibilities, ranked

1
Contraction continues55%
September industrial output is also negative year on year, the manufacturing PMI stays below 50 and the fall in capital goods deepens.
Watch: The October PMI and September industrial output data due in early November
2
Flattening at the bottom30%
Higher capacity utilisation feeds into output and the annual decline narrows below 1% without turning to growth.
Watch: October capacity utilisation staying above 74%
3
Recovery15%
A possible rate cut and stronger export orders return manufacturing to annual growth.
Watch: The PMI new export orders sub-index rising above 50

Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.

Market reaction

Indicators affected

Industrial output (y/y)▼ −1.9%
Manufacturing (y/y)▼ −2.5%
Capital goods (y/y)▼ −5.1%
High technology (y/y)▲ +14.5%

Bottom line

Likely effects

Possibilities, ranked

Sources