According to the data announced by the Istanbul Chamber of Industry (ISO) and IHS Markit; Manufacturing PMI fell to 52.5 from 54.1 in September. While the overall strong growth perspective was maintained in 3Q21, a partial slowdown was observed in September. On the other hand, the strong growth zone is preserved in terms of index level and manufacturing activity. PMI has been in growth zone above 50 basis points since June 2020, excluding May 2021 (closing effect).
If we look at the details of the PMI data; The increase in production and new orders continues. The demand image, which has been supportive in the framework of increasing economic activity in the recent period, supports this outlook. However, the stock-reducing effect of sales may indicate an increase in pending work and a slowdown in production due to the difficulties in input supply in the new period. On the employment side, we observe very positive effects of the increasing works of the companies. In September, we saw that the capacity utilization rate of manufacturing companies increased by 1 point to 78.1%. CUR has reached pre-pandemic and 2018 levels.
Based on the input supply shortages, the companies' secure strategic stock creation is currently helping to fulfill the orders. By contrast, delivery and shipping times will likely be longer than earlier in the year. In particular, the shortage of raw materials brings along slowdown in imports and increased production costs due to decreased supply. Production costs are also affected by transportation costs in the raw material procurement process. We observe that price pressures in the sector remain high as per the relevant indicator. Depending on the supply constraints, in addition to the input costs of the firms, the exchange rate also increases the price pressures. We expect input costs to maintain their inflationary impact on sales prices.
While we continue to view the growth momentum as positive in general, we care about the production gap risk of the problems in the global supply chain, as well as the increased production costs due to input costs and exchange rate effects. Reasons such as the fact that the acquisition of imported inputs is highly dependent on the exchange rate may increase the felt effect. At the same time, global economies are at risk of slowing down due to similar production deficits, except for Covid-19 pandemic measures. In particular, we think that macroeconomic risks within the scope of domestic demand and external demand components should be followed in terms of growth outlook. On the other hand; The rollover effect from previous quarters and leading indicators obtained in 3Q21 point to strong growth throughout the year, supported by factors such as industrial production, machinery and equipment investment, and net exports. We expect the growth to be in line with the 9% target stated in the MTP.
Kaynak Tera Yatırım-Enver Erkan
Hibya Haber Ajansı