Turkey's Unemployment Rate Declined to 8% in June, Lowest in Record

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Researched by Industrial Info Resources (Sugar Land, Texas)--Turkey's unemployment rate dropped to 8% in June from 8.2% in May, the lowest level ever seen in the country, while the more relevant seasonally adjusted figure remained flat at 8.9%. According to Turkey's Statistical Institute (TURKSTAT), on seasonally adjusted figures, the number of unemployed increased 24,000. The increase in the number of employed provided a partial offset of 12,000, while the decline in the labor force also helped to maintain a stable unemployment rate.

Unadjusted numbers show that almost all of the gains were due to a large employment increase in agriculture and construction, which are driven by seasonal factors, while the number of those employed in manufacturing remained flat. "We believe the seasonally adjusted unemployment level will remain below its present level or increase marginally in the coming months, given the deceleration in growth," said Sengul Dagdeviren, chief economist of ING Bank, based in Istanbul.

The workforce participation rate, a measure of how many people of working age have jobs or are seeking employment, remained almost unchanged 49.7%, TURKSTAT figures showed. The economy added 676,000 jobs in June when compared with the same month last year, most of which came from service sectors; administrative & support service activities, public administration & defense, and education led in contribution to job growth.

In yearly growth levels, the fastest expansion in employment has been seen in the scientific & technical activities profession, with a 24% rise in employment, followed by information & communication services and real estate, which both had 22% growth rates. Job creation in manufacturing was much less significant, contributing 83,000 to the 676,000, increasing 1.9% in June.

"Structurally, employment seems to be shifting further toward the service sector, which has been the key contributor to job creation in recent months," said Christian Keller, a senior emerging markets economist at Barclays Capital based in London. "Following a long-term trend, labor continues to move away from the agriculture sectors, which, even so, still account for about one-fourth of total employment in Turkey. The recent confidence indicators on the labor market have been weakening (including purchasing manager's index (PMI) and capacity utilization), which makes further improvement in the unemployment rate in the coming months less likely." For additional information, see September 5, 2012, article - European PMI Readings Point to Gloomy Outlook, Increases Worries of Recession.

The Turkish economy grew 2.9% year-over-year in the second quarter of 2012, down from 3.3% yearly in the first quarter, according to figures from TURKSTAT. The Turkish government is targeting a 4% growth in gross domestic product in 2012, while the International Monetary Fund forecasted Turkey's year-end 2012 growth at 2.3%. For additional information, see September 12, 2012, article - Turkish Economy Expands 2.9% in Second Quarter as Rebalancing Deepens.

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