According to calendar adjusted data, Turkey’s industrial production in December increased by 9% compared to the same month of the previous year; Seasonal and calendar adjusted industrial production increased by 1.3% compared to the previous month. According to unregulated data, industrial production increased by 12.1% compared to the same period of the previous year. Our estimation was that industrial production increased by 8.5% on an annual basis and 1% on a monthly basis in December.
Industrial production data point to an annual increase of 9%, which is 8.5% above our expectation. In the 3Q20 period when the effects of the pandemic were tried to be normalized, the industrial sector grew strongly with the effect of loan growth. It is observed that the activity continued to follow a strong trend in 4Q20 and beyond, when financial conditions tightened. During the year, we saw the impact of loan growth in items such as durable consumer goods, investment goods, machinery and equipment.
When we look at the details; While mining and quarrying increased 3.5% on a monthly basis, it increased 6% on an annual basis. While there was an increase of 1.4% on a monthly basis in the manufacturing industry, there was a growth of 9.5% on an annual basis. In the electricity, gas and steam group, a contraction of 1.4% was observed on a monthly basis, while the increase was realized at the level of 4.9% on an annual basis. Capital goods and intermediate goods increased by 1.9% and nondurable consumer goods by 1.3% on a monthly basis. Energy contracted by 1.3% and durable consumer goods by 0.8%. Considering the annual changes in the related items; intermediate goods increased by 12.9%, durable consumer goods by 8.2%, capital goods by 7.8%, non-durable consumer goods by 6.2% and energy by 2.5%.
The positive outlook that extends to the 4Q20 period indicates that growth will also be above previous projections. The Central Bank's slowdown in credit growth and the long-term establishment of tight monetary policy may bring along a slowdown in the pace of this period’s growth compared the August-September-October period. On the other hand, it is seen with the increase in PMI that the activity in the industry continued strongly in January. 1Q21 is foreseen as the slowest quarter of the year due to epidemic conditions, however, the growth outlook may be realized better with the support of the manufacturing sector, depending on the relatively strong course of economic activity.
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