Although the real sector confidence index data for October, announced by the Central Bank, decreased compared to the previous month, the index level continues to be well above the pandemic period. While RSCI decreased by 3.8 points to 109.6 in October; The seasonally adjusted RSCI, on the other hand, decreased by 2 points to 111.3.

 

In this period, the manufacturing industry capacity utilization rate decreased by 0.1 points to 78%; The seasonally adjusted CUR, on the other hand, was 77.5%.

 

When the diffusion indices of the survey questions that make up the index are analyzed, while the evaluations regarding the fixed capital investment expenditure and the total order amount in the last three months affected the index upwards; Evaluations regarding the production volume in the next three months, the general trend, the current product stock, the total employment in the next three months, the total employment in the next three months, total employment, export order amount and current total order amount affected the index downwards.

 

After the 3Q21 period, which was passed with a strong trend in terms of economic growth and production profile, data for 4Q21 including the effects of partial slowdown were obtained. In this context, we can see some reflections in the production capacity and sectoral confidence indices that we monitor together with PMI in terms of the general situation and activity intensity of the manufacturing industry. We observe that the shortcomings in global raw material supply, rising production costs and uncertainties arising from foreign exchange and interest rate factors in the domestic market create downside risks. In this context, we may see a slight decrease in the PMI index for October. In addition to the global cost factors in particular; We evaluate factors such as the rapid depreciation of the lira, the rising cost of risk due to the rise in bond yields and CDS, and its impact on borrowing. Therefore, the financing factors and demand conditions in the economy, which we consider determinant regarding the goods and services produced, may be a factor of reservation.

 

The recovery in the Euro Zone had a positive impact on our exports and ensured the improvement in foreign demand conditions. However, increasing orders and work capacity also positively affect employment trends. In particular, the effect of the increase, supported by the increase in activity in contact works with the removal of social restrictions, is important for the continuity of the production line. At this point, the factors that may be compelling for companies are the side costs that increase with the withdrawal of pandemic supports and employment protection programs, the additional cost effect to be experienced in the supply of goods from the market this time with the acceleration of the increase in the exchange rate even if the interest rates have decreased in the last 2 months, and the FX based forward and non-option-based payments.

 

Therefore, we maintain our reservations that macroeconomic uncertainties affect both production and investment trends negatively and cause a partial slowdown. In the context of increasing investment tendencies and decreasing costs, we consider it necessary to decrease financing costs provided by inflation, to stabilize the exchange rate and to balance risk conditions. Against this; We think that a growth of 9.6% in 2021 can be achieved with factors such as the cumulative effect of transfer from previous periods in growth, strong export profile and production activity over the pandemic period. We expect slower growth for 2022 (4.2%) and beyond, due to the normal course of growth and downside macroeconomic uncertainties.

Kaynak Tera Yatırım-Enver Erkan
Hibya Haber Ajansı