Turkey Manufacturing PMI rose to 49.0 in July

Istanbul, August 1 (DHA) – Turkey Manufacturing PMI rose to 49.0 in July, up from 46.8 in June, signalling further challenging business conditions in the Turkish goods-producing sector as output and new orders continued to slow. Istanbul Manufacturing PMI rose to 51.0 in July from 49.5 during June.

The challenging business conditions faced by the Turkish manufacturing sector continued during July, as signalled by the latest PMI® survey data from Istanbul Chamber of Industry and IHS Markit.

According to data;

• Further slowdowns in output and total new orders weighed on the headline figure. On the other hand, new export orders rose for the first time in three months and goods producers increased staffing levels.
• Inflationary pressures meanwhile rose in the manufacturing sector amid a weaker lira. Input prices rose at a marked and accelerated pace which subsequently led firms to increase their average selling prices further.
• However, the health of the sector slowed down only marginally and at the weakest rate observed across the current four-month slowdown.
• Total new orders continued to weigh on the headline figure in July. Output also lost pace in response to demand conditions. However, both slowed down at a more moderate pace compared to the prior survey period.
• On a more positive note, foreign demand strengthened with exports entering expansion territory following two successive months of slowdown.
• As a result, Turkish goods producers increased their staffing levels for the first time in four months at the start of the third quarter.
• Elsewhere, price pressures continued to strengthen as exchange rates remained unfavourable.
• Raw material prices rose as a result of the weak lira causing input prices to increase at a marked pace.
• In fact, input price inflation recorded the fastest pace since June 2006. Consequently, output price inflation sharpened to a 12-year high.

Commenting on the Istanbul Chamber of Industry Turkey Manufacturing PMI survey data, Gabriella Dickens, Economist, IHS Markit, made following remarks:

“The headline figure suggested that challenging business conditions continued in the Turkish manufacturing sector during July, though the slowdown moderated.

“On a positive note, export orders and employment increased, partially offsetting slowdowns in total new orders and output. ,

“Inflationary pressures sharpened further with output price inflation rising to a 12-year high.”