Manufacturing PMI rises slightly

ISTANBUL

The headline PMI ticked up to 47.4 in December from 47.2 in November but continued to point to a moderation of business conditions in the Turkish manufacturing sector as 2023 drew to a close, a survey conducted jointly by the Istanbul Chamber of Industry (İSO) and S&P Global has shown.

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

The latest slowdown extended the current period of softening operating conditions to six months, contrasting with a sequence of improvement seen in the opening half of the year, said the report.

“Market conditions were challenging both domestically and abroad, resulting in a slowdown in new orders and scaling back of production.” More positively, employment stabilized, it said.

A lack of demand was highlighted by further slowdowns in both total new orders and new business from abroad, with firms able to work through backlogs again during the month.

Weak demand for inputs helped suppliers speed up their deliveries, ending an 11-month sequence of lengthening lead times, according to the survey.

“Currency weakness, higher wages and increased raw material prices meant that input costs rose again in December, but the rate of inflation eased for the fifth month running.”

There were also further signs of cost pressures easing, although that didn't translate into softer rises in selling prices in December, commented Andrew Harker, economics director at S&P Global Market Intelligence.

“The potential for a more subdued inflationary environment in 2024 could provide some hope for a demand recovery in the sector,” he said.