In March, industrial production in Turkey increased by 9.6% compared to the same month of the previous year, according to calendar adjusted data; Seasonally and calendar adjusted industrial production decreased by 1.8% compared to the previous month. According to unadjusted data, industrial production increased by 9.5% compared to the same period of the previous year.
While industrial production is in line with our expectation of a contraction of 1.8% on a monthly basis, it continues to increase at an appropriate pace on an annual basis compared to the previous year. The decrease in the last 1-month period shows the negative effects of the Ukraine crisis on the industry. The war that took place in the near geography of Turkey and the direct effects on Europe are also felt on the industry side. Due to the geopolitical crisis, the current situation in global input deficits and costs seems to continue in the coming months. While the increase in annual data continues, as the capacity reaches a certain level, the production rate is above the previous year. However, we think that the increases in the annual industrial production index will have a decreasing trend in the coming months due to war, high inflation and increases in cost inputs.
When we look at the details; While mining and quarrying decreased by 4.9% on a monthly basis, it grew by 2.9% on an annual basis. While a decrease of 2.2% was observed in the manufacturing industry on a monthly basis, there was a growth of 10.6% on an annual basis. In the electricity, gas and steam group, an increase of 4.8% was observed on a monthly basis, while the annual growth was realized as 1.9%. While energy increased by 5.5% on a monthly basis; capital goods decreased by 10%, durable consumer goods by 3.9%, non-durable consumer goods by 0.7% and intermediate goods by 0.4%. Looking at the annual changes in the related items; Non-durable consumer goods increased by 16.1%, intermediate goods by 8.9%, durable consumer goods by 7.4%, energy by 6.2% and capital goods by 4.9%.
Along with factors such as geopolitical risk and supply chain disruptions in the industry, the slowdown trend will be at the forefront in the coming months. On the export and domestic demand side, there is a fragile and constantly variable demand due to the existing factors. The raw material demands of companies producing export items to Europe are closely related to the state of global supply. Due to the breaks in the supply chain, especially Europe is looking for more regional supply opportunities and alternative supply channels. Foreign demand is vulnerable to global recession threats. On the other hand, we evaluate the effect of high inflation in terms of domestic demand and the cost factors in terms of investment tendencies of companies as negative.
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