Deniz Kılınç / Istanbul, July 1 (HNA) – Turkish manufacturing sector conditions have softened in four successive months, according to the latest PMI® survey data from the Istanbul Chamber of Industry (ISO) and S&P Global
At 48.1 in June, down from 49.2 in May, the headline PMI signalled a moderation in the health of the Turkish manufacturing sector and one that was the most marked since the initial wave of the Covid-19 pandemic in early 2020.
New orders, output and purchasing activity all softened, with continued job creation the main positive. Meanwhile, rates of input cost and output price inflation remained sharp.
Commenting on the Istanbul Chamber of Industry Türkiye Manufacturing PMI survey data, Andrew Harker, Economics Director at S&P Global Market Intelligence, said:
“Turkish manufacturers are facing a challenging market environment at present, with price rises and demand weakness combining to lead to softer new orders and a scaling back of production. “Increases in employment were again the main
positive, although even here the rate of job creation was among the softest in the past two years. The months ahead seem likely to continue to prove challenging for firms.”
The headline Istanbul Chamber of Industry Türkiye Manufacturing PMI is a composite single-figure indicator of manufacturing performance. It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases. Any figure greater than 50.0 indicates overall improvement of the sector.
Employment remained a bright spot within the latest results, with firms continuing to expand their staffing levels. That said, the rate of job creation was the second-softest in the current 25-month sequence of rising workforce numbers.
After showing signs of improvement in May, the latest Türkiye Sector PMITM report suggested that a range of sectors took a step backwards at the end of the second quarter. Nine of the ten monitored categories saw new orders moderate, with a majority also posting a slowdown in output. Meanwhile, inflationary pressures remained pronounced. Despite a range of challenges facing firms in June, employment continued to rise in most sectors covered.
Andrew Harker commented on the June survey results, “The latest Sector PMI data for Turkey is somewhat concerning given that we’ve seen a retreat from the generally improving picture registered in May. Only the clothing and leather products sector was able to secure growth of new orders as global economic conditions weakened amid the strain of inflationary pressures” and added:
“Likewise, a number of sectors saw their costs increase at a faster pace in June, reversing the recent trend of softer
inflationary pressures. “Most sectors continued to expand their staffing levels as the labour market again provides the main source of positivity from the latest report, but it remains to be seen how long this can continue given the
challenging economic backdrop.”