Turkey's unemployment decreases to 10.6 percent in August

DAILY SABAH WITH ANADOLU AGENCY
ISTANBUL
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Turkey's unemployment decreased 0.7 percentage point to 10.6 percent in August year-on-year, a slight decrease from July's rate of 10.7 percent, Turkish Statistical Institute said Wednesday.

The number of unemployed persons aged 15 years old and over decreased by 89,000 to 3.4 million in August 2017 compared with the same month the previous year.

In the same period, non-agricultural unemployment stood at 12.8 percent with a 0.9 percentage point decrease. While youth unemployment rate including persons aged 15-24 was 20.6 percent with a 0.7 percentage point increase, the unemployment rate for persons aged 15-64 occurred at 10.8 percent with a 0.7 percentage point decrease.

The number of employed persons rose by 1.35 million to 28.8 million, whereas the employment rate was 48 percent with a 1.3 percentage point increase. Employment in agriculture increased by 193,000, whereas and the non-agricultural employment increased by 1.16 million thousand.

According to the distribution of employment by sector, 20.7 percent of the workforce was employed in agriculture, 18.9 was in industry, 7.9 in construction and 52.6 in services. Employment in agriculture decreased by 0.3 percentage point, industry decreased by 0.2 percentage point while construction increased by 0.5 percentage point and services stood unchanged.

The labor force increased by 1.26 million to 32.23 million, whereas the labor force participation rate (LFPR) was 53.7 percent with 1.1 percentage point increase. LFPR for males was 73.5 percent with 0.9 percentage point increase and the rate for females was 34.3 percent with 1.2 percentage point increase.

The ratio of persons working without any social security relating to their primary job was 35.1 percent with 0.5 percentage point increase. In the non-agricultural sector, the rate of unregistered employment was 22.2 percent with an increase of 0.5 percentage points compared to the same period of the previous year.

According to data gathered by The Ministry of Finance, total public sector employment realized as 3.57 million, a 0.2 percentage point increase in the third quarter of 2017 compared to the same period the previous year.

Seasonally-adjusted employment increased by 204,000 and stood at 28.33 million, whereas the seasonally-adjusted employment rate was 47.2 percent with a 0.3 percentage point increase. Seasonally-adjusted unemployment decreased by 111,000 to 3.41 million. The unemployment rate was 10.8 percent with a 0.3 percentage point decrease.

Seasonally-adjusted LFPR was 52.9 percent with a 0.1 percentage point increase compared with the previous period. According to the number employed by sector, employment in agriculture decreased by 35,000 while industry increased by 74,000, construction increased by 59,000 and services increased by 105,000.

Ziraat Bank's economist Bora Tamer Yılmaz said Turkey was a worldwide overachiever this year, considering the number of jobs the country generated.

Underlying the distribution of employment by sector, Yılmaz said the services sector acted as a flagship.

"In manufacturing, services, and construction employment has hit its all-time highs in August," Yılmaz said.

"Tourism has contributed to economic growth this year via job creation. About one-fourth of all services jobs created belongs to tourism."

Yılmaz said an upbeat global trade volume and better economic activities in Europe along with domestic developments helped the Turkish economy to create new jobs and keep its workforce steady in the manufacturing sector.

"European prospects deem good about coming months. Therefore, we expect that strong external demand will continue propelling domestic manufacturing," Yılmaz said.

Erol Gürcan, an economist at Gedik Investment, said August's unemployment rate is better than market expectations.

The unemployment rate showed an upward trend after the first half of the year while it had a downward trend at the beginning of 2017, Gürcan said.

He said the latest figure indicated that the government's employment campaign and recovery in economy had a positive effect on the country's employment.

"In sum, Turkey's unemployment rate confirms strong economic activity in the third quarter of 2017," he added.

KapitalFX Analyst Enver Erkan said the unemployment rate in July and August was expected to be higher due to seasonal effects; however, it declined month-on-month.

Erkan said unemployment rate could reach double-digits in the near future despite an expected strong third-quarter GDP growth outlook.

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