Three-quarter performance in 2017 not satisfactory
Tarih : 28.12.2016
One might express that the performance displayed by the Turkish plastics industry remained below expectations during the first three quarters of 2017
Similarly, the leap threshold for the plastics industry seems to remain at low levels compared to a number of industrial branches. Those three factors we think effective in this outcome are:
1. The first thing is the base effect demonstrated during 2016. Many industrial branches underwent downsizing due to a number of factors such as military coup attempt, terrorism, cyclical conflicts, etc. of 2016. This is expected to result in a leap effect on manufacturing figures for 2017. However, it is not highly likely that the intended base effect will appear in the plastics industry considering three-quarter performances. The most fundamental reason is the structural nature of downsizing of 2016 accompanied by the balances between key industrial players disturbed by the handovers of businesses to TMSF (Saving Deposit Insurance Fund). Consequently, we estimate the industrial growth in manufacturing to be about 5% at the end of 2017.
2. The second factor is governmental incentives getting off to a running start this year. The relatively extensive incentives, offered by the government to stimulate economy, appeared to have positive impacts on the plastic machinery industry. On the other hand, the observation is that these incentives also revived import as a result of the dependence on import input in terms of raw materials and products. We foresee that the impact of incentives on investments will start to become apparent from 2018.
3. The third, but striking factor is the failure by the industry to benefit from the foreign trade impact of devaluation on export to a relatively adequate extent. For export in 2017, the devaluation, as well as the base effect, seems to have a positive impact on our general export volume by offering advantages in terms of price competition. Apparently, however, unit prices are not at the intended level particularly for plastic products export and the quantitative export rise remains about 4% and the export rise in dollars is hardly stuck between 2-3%.
4.1% three-quarter rise in the Plastics Manufacturing Index
The Turkish Statistical Institute (TUIK) develops a manufacturing industry index on a monthly basis with intent to see the course of the manufacturing industry and to monitor the growth trend. The sum of the output achieved by an establishment as of the estimation period and the output which is outsourced by that establishment at another establishment by providing materials and raw materials is incorporated into the index in line with sales unit prices. Thus, the change in production (growth or downsizing) in the industry and sub-industries is estimated
In the light of this preliminary data and as evident from the chart below, the increase in the plastic manufacturing index, whose Nace Rev2 code is 22.2, turned out to be 4.1% for the period from January to September 2017 compared to the mean index value effective during the first nine months of the previous year.
Source: TUIK (Turkish Statistical Institute)