Manufacturing activity contracts for second straight month

ISTANBUL

The headline PMI in the manufacturing sector posted below the 50 no-change mark for the second consecutive month in May, dropping to 48.4 from 49.3 in April, a survey by S&P Global has shown.

Any figure greater than 50 indicates overall improvement in the sector.

The latest reading signaled a modest slowdown in business conditions in the sector, but one that was the most pronounced in 2024 so far, the report said.

“The softening in the health of the sector was reflected in a range of variables from the survey in May. In particular, firms reported a solid moderation of new orders, with the pace of easing the most pronounced since January.”

The slowdown was often linked by panelists to challenging demand conditions, with some customers deterred by high prices, it said, noting that these factors also contributed to a softening of new export orders, the 11th in as many months.

There were further signs of inflationary pressures easing, with both input costs and output prices increasing at much weaker rates in May, according to the survey.

Staffing levels were reduced for the fourth consecutive month, as some firms indicated a reluctance to replace departing staff given lower workloads, said the report.

Purchasing activity and inventories of both inputs and finished goods were all scaled back in May, in each case following increases in April.

“Latest data suggest that Turkish manufacturers are facing an increasingly challenging operating environment, with new work seemingly harder to come by,” commented Andrew Harker, economics director at S&P Global Market Intelligence.

Given the still detrimental impact high prices are having on demand, an easing of these pressures will hopefully help lead to a recovery in the sector over the second half of the year, he said.