Fueled by the normalization process and measures implemented to strengthen the real sector, Turkey's industrial production in July rose 8.4% month-on-month, the country’s statistical authority said Monday.

The industrial production index, which declined to 78.1 points in April, when the COVID-19 pandemic hit its peak, climbed to 119.3 points after posting three months of recovery in a row. The overall recovery exceeded 50% when compared to April. The industrial production also posted a 4.4% increase on an annual basis.

Commenting on the data, Treasury and Finance Minister Berat Albayrak thanked all the producers, who trust and believe in the future of the country, for their efforts.

"Industrial production increased by 4.4% and retail sales volume by 11.9% in July. Besides, the turnover index in the construction, trade and service sectors increased by 20.2% annually in July," he said on Twitter.

When the subsectors of the industry were examined, the manufacturing index posted the highest rise in the month with 8.6% compared with a month earlier.

"The mining and quarrying index also increased by 5.4% and electricity, gas, steam and air conditioning supply index rose by 6.4% in July 2020," the Turkish Statistical Institute (TurkStat) said.

Economists who participated in an Anadolu Agency (AA) survey estimated a 3.9% increase in the unadjusted industrial production index in July.

Among top 3 worldwide

The measures taken in the country stimulated the real sector and that all subsectors posted positive outcomes on monthly basis, Industry and Technology Minister Mustafa Varank said, evaluating the data.

Maintaining the positive divergence in production in the global economy, "We took our place in the top 3," he said on Twitter.

The minister stressed that they expect high growth in the third quarter.

According to a graphic showing monthly change in countries' industrial production in July, Turkey came in third after Portugal’s 11.9% increase and Spain's 9.3% rise, leaving behind India, Japan, China, the U.S. and South Korea.

The country, with the 4.4% yearly increase ranked fourth on a global scale, following Ireland, Norway and China.

While the mining and quarrying index went down by 4.9%, the manufacturing index posted a 5.1% rise in July compared with the same month of the previous year.

The electricity, gas, steam, and air conditioning supply index also increased by 1.4% in July annually.

Economists commenting on the data also said it is noteworthy that the upward trend started after normalization steps in industrial production were maintained in July and that the positive momentum may continue in August, and this may positively reflect on the growth figures for the third quarter.

Haluk Bürümcekçi, a finance analyst and economist at Anadolu Agency (AA), said current signals suggest that the momentum achieved in June after the lifting of quarantine measures may reflect positively on growth data as of the third quarter.

Bürümcekçi said the return from the bottom started in May, which indicates that the recovery has now gained moderate strength.

"On a quarterly basis, this year a positive entry was made into the third quarter after a significant loss of 0.06% in the first quarter and 20% in the second quarter," he said.

Enver Erkan, an economist at Tera Yatırım, also said that there is positive data in line with market expectations and the terms of growth rates.

"During the controlled normalization phase in July, increasing business activities and related production trends showed that the recovery from the bottom was strongly maintained," he said.

Erkan noted, however, that this trend is expected to lose momentum as of August.

"The picture shown by leading indicators, especially the real sector confidence index, reveals that the recovery after August may slow down. In the context of COVID-19 uncertainty, the increase in the number of cases can bring back containment measures or affect sectoral demand trends, which may slow production. Industrial production may also be affected, especially in terms of providing inputs to sectors affected by the pandemic," he said, noting that imports of intermediate goods, which have an important place in industrial production within the framework of exchange rate developments, remain on a fragile level.

Total turnover up

Meanwhile, according to a separate report by TurkStat on Monday, the Turkish economy posted a sharp rise in total turnover in July – over 20% – on a yearly basis.

"Total turnover index including industry, construction, trade and services sectors increased by 20.2% on annual basis in July 2020," it said.

The index saw the biggest change in the trade sector, up 32.9% year-on-year in July, the official figures showed.

The industry sector registered an annual rise of 20.2%, while construction and services indices increased by 14.9% and 12.5%, respectively.

On a monthly basis, the seasonally and calendar-adjusted total turnover index was up 11.7% in July.

According to TurkStat, turnover is an important short-term indicator used to assess the country's economic situation.

"Turnover indices are calculated to follow the changes of this concept which is composed of sales of goods and services invoiced by the enterprise in the reference month over time, to monitor the development on a quarterly and yearly basis," it said.

All enterprises that declare their value-added tax to the country's Revenue Administration are included in the turnover index calculation.

Increasing trend in July

Besides, according to the retail sales index, to which Albayrak referred, Turkey's retail sales volume with constant prices rose 11.9% year-on-year in July, TurkStat data showed.

"In the same month food, drinks and tobacco sales increased by 12.3%," it said.

Excluding automotive fuel, nonfood sales posted a 13.9% increase, while automotive fuel sales saw a 7.2% rise over the same period.

Among nonfood items, the volume of electronic goods and furniture sales grew 27.7% on an annual basis in July.

It was followed by computers, books and telecommunications equipment sales, increasing 13.8% during the same period.

Also rising were textile, clothing and footwear sales – 1.9% – and medical goods and cosmetic sales – up 4.4% – from the same month last year.

Sales by mail order and the internet jumped 99.2% year-on-year in the month.

Monthly, retail sales volume with constant prices soared 9.5% in July, TurkStat said.