Turkey: Manufacturing PMI at 52.1 in December According to the veri announced by the Istanbul Chamber of Industry (ISO) and IHS Markit; Manufacturing PMI rose from 52 to 52.1 in December. Despite the negative effects of inflationary pressures on the manufacturing sector, demand and production lost momentum due to intense price increases. 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 veri; High-rate increases were recorded in input costs and final product prices. Despite the slowdown in production and new orders, the sector continued to increase employment in December as well. The increase in input costs points to a record increase rate of recent years, as evidenced by the December inflation rates released today. While cost burdens continue to be driven largely by the depreciation of the lira, the impact of consumer inflation increases rapidly as this is reflected in the price of goods sold. Along with the uncertainty brought about by price increases, the difficulty of replenishing goods and stocks affects the sales in the market, makes it difficult to obtain goods from suppliers and negatively affects customer orders.
In export orders, a relatively good situation is observed with the foreign demand-oriented image abroad. Firms, on the other hand, expand employment within the scope of increasing their production capacity. On the other hand, the decline in general order trends and the slowdown in domestic market conditions pose a downside risk for the expansion of the sector. There is a reservation that price pressures cause a production slowdown due to the demand shock. At this point, since a concept such as “replacement cost” has emerged in terms of supplying and renewing goods and stocks, not only the profit margin obtained from the existing input is taken into account, but also the suppliers reflect the additional cost elements that arise during the stock replenishment process to the price of the goods sold. This situation leads to withdrawal from delivery or purchase due to difficulties in determining forward prices, and accordingly, a slowdown in commercial activity. A similar sorun is experienced in overseas delivery and raw material supply, küresel price pressures and high transportation costs create problems in terms of input supply and delivery times. Price fluctuations are still very high. The cost management of companies will come into play at this stage and will be evaluated in terms of both production and employment trends.
It is observed that the main problems are concentrated on the cost axis. In particular, price uncertainty and increases due to fluctuations in domestic exchange rates layer the inflation effect caused by disruptions in küresel supply chains. This may adversely affect domestic demand and production trends. As for foreign demand, it is necessary to evaluate the situation of the Covid-19 outbreak in terms of the Omicron variant, especially in terms of our main supply regions and export markets. We anticipate that all these developments may be challenging for the sector and cause sectoral momentum losses.
Kaynak Enver Erkan
Hibya Haber Ajansı
If we look at the details of the PMI veri; High-rate increases were recorded in input costs and final product prices. Despite the slowdown in production and new orders, the sector continued to increase employment in December as well. The increase in input costs points to a record increase rate of recent years, as evidenced by the December inflation rates released today. While cost burdens continue to be driven largely by the depreciation of the lira, the impact of consumer inflation increases rapidly as this is reflected in the price of goods sold. Along with the uncertainty brought about by price increases, the difficulty of replenishing goods and stocks affects the sales in the market, makes it difficult to obtain goods from suppliers and negatively affects customer orders.
In export orders, a relatively good situation is observed with the foreign demand-oriented image abroad. Firms, on the other hand, expand employment within the scope of increasing their production capacity. On the other hand, the decline in general order trends and the slowdown in domestic market conditions pose a downside risk for the expansion of the sector. There is a reservation that price pressures cause a production slowdown due to the demand shock. At this point, since a concept such as “replacement cost” has emerged in terms of supplying and renewing goods and stocks, not only the profit margin obtained from the existing input is taken into account, but also the suppliers reflect the additional cost elements that arise during the stock replenishment process to the price of the goods sold. This situation leads to withdrawal from delivery or purchase due to difficulties in determining forward prices, and accordingly, a slowdown in commercial activity. A similar sorun is experienced in overseas delivery and raw material supply, küresel price pressures and high transportation costs create problems in terms of input supply and delivery times. Price fluctuations are still very high. The cost management of companies will come into play at this stage and will be evaluated in terms of both production and employment trends.
It is observed that the main problems are concentrated on the cost axis. In particular, price uncertainty and increases due to fluctuations in domestic exchange rates layer the inflation effect caused by disruptions in küresel supply chains. This may adversely affect domestic demand and production trends. As for foreign demand, it is necessary to evaluate the situation of the Covid-19 outbreak in terms of the Omicron variant, especially in terms of our main supply regions and export markets. We anticipate that all these developments may be challenging for the sector and cause sectoral momentum losses.
Kaynak Enver Erkan
Hibya Haber Ajansı