Industrial employment raises alarm

Economic Service

While labor input indices increased year-on-year in the second quarter of 2025, the industrial sector saw declines in both employment and hours worked. Conversely, recovery was seen in the construction and service sectors. TurkStat data revealed that despite rising labor costs and wages, hours worked experienced quarterly declines.

According to the data, while the employment index for the industry, construction, and trade-services sectors increased by 1.9 percent annually in the second quarter of 2025, employment in the industrial sector on an individual basis decreased by 2.2 percent annually. During the same period, the hours worked index increased by only 0.6 percent and decreased by 2.7 percent quarter-over-quarter. The decline in industrial employment reveals the sector's current crisis.

The increase in the gross wage and salary index was notable. The annual increase was recorded as 44.3 percent. Sector-wise, the construction and trade-services sectors saw an increase of over 47 percent, while the industrial sector lagged behind other sectors with 38.3 percent. The quarterly increase was 10.8 percent. Significant increases were also seen in the hourly labor cost and hourly earnings indexes. Annual increases were 44.3 percent in hourly labor cost, 43.4 percent in hourly earnings, and 48.7 percent in hourly labor cost excluding earnings. On a quarterly basis, all of these indices increased by 13.9 percent.

The picture varied across subsectors. While employment in the industrial sector decreased by 2.2 percent annually, the construction and trade-services sectors increased by 6.7 percent and 3.2 percent, respectively. The hours worked index decreased by 3.7 percent in industry, while increases were recorded by 4.4 percent and 2.3 percent in construction and trade-services. The gross wage and salary index increased by over 47 percent in the construction and trade-services sectors, while it reached 38.3 percent in industry.