(Adds jobless claims data)
ISTANBUL, Dec 5 (Reuters) - Turkish industrial production fell a larger-than-expected 8.5 percent year-on-year in October while capacity utilisation also tumbled, official data showed on Friday, confirming a sharp economic slowdown.
Turkey's economy has grown some 7 percent annually since a 2001 financial crisis but activity has slumped due to a slide in domestic and foreign demand as the global financial crisis takes its toll on the emerging market economy.
The 8.5 percent fall in industrial production, announced by the Turkish Statistics Institute, exceeded a 7.5 percent median forecast in a Reuters poll. In September, industrial output had fallen 5.5 percent - the worst performance since December 2001.
The Turkish government is currently working on a loan accord with the International Monetary Fund to underpin the economy and replace a $10 billion stand-by accord which expired in May.
It has also announced a series of measures designed to ease access to credit and boost economic activity. Turkish financial markets have been battered by the global crisis.
Adding to a series of negative economic indicators, the number of jobless claims soared 146.9 percent in November from a year earlier to 139,233, Turkish Unemployment Agency data showed.
Turkey's economy has sharply slowed down and many factories have shut down or made workers redundant as consumers become increasingly frugal and exports dip.
The data showed that 69.1 percent of the new jobseekers were male and more than one third between 15-24 ages.
The manufacturing sector shrank 10.3 percent year-on-year in October, the mining sector grew 15.4 percent while utilities shrank 1.5 percent.
The statistics institute also announced on Friday that capacity utilisation fell 9.7 percentage points year-on-year in November to 72.9 percent.
Capacity utilisation, a leading indicator of manufacturing industry and economic growth, had stood at 76.7 percent in October. (Reporting by Daren Butler; Editing by Ron Askew)