Factory activity in Turkey contracts

ISTANBUL - Reuters

Turkish factories’ activities have shrunk in July, while the their European counterparts have posted a recovering outlook, survey results showed. DHA Photo

Turkey’s manufacturing sector contracted in July for the first time in a year due to stagnating production and lowering orders, a survey showed yesterday, while eurozone manufacturing activity grew for the first time in two years.

Markit’s Purchasing Managers’ Index (PMI) of manufacturing companies for Turkey fell to 49.8, below 50 points threshold which separates growth and contraction, from 51.2 in June.

The narrower index of output alone retreated to 50.1 from 52, indicating stagnation, so the contraction of the manufacturing was mainly driven by the plunge in new orders.

The index showing the new orders received by companies nudged down below the 50 border, to 48.2.The export orders index also fell to 47.1, after rising to 50.6 in June. The plunge in export orders in July is the steepest since August 2011.

The manufacturing companies cited the anti-government protests that continued in Turkey throughout June, the fragile political conditions in Egypt, and the slowing market as the cause of the fall in export orders.

Meanwhile, the same survey conducted for the eurozone revealed a recovering outlook in the bloc’s manufacturing, suggesting that the region may pull out of recession this quarter. The eurozone PMI rose to 50.3 in July from June’s 48.8, revised slightly higher from a preliminary reading of 50.1 and crossing the 50 threshold for growth for the first time since July 2011. Greek manufacturing activity shrank at the slowest pace in more than three years in July, while Germany, the largest economy of the union, saw its manufacturing sector return to growth.