Turkish manufacturing activity shrinks for fifth straight month in August

ISTANBUL

Turkish manufacturing activity contracted for the fifth consecutive month in August as output and new orders slowed down on the back of a currency crisis, a business survey showed on Sept. 3.

The manufacturing Purchasing Managers’ Index (PMI) fell to 46.4 from 49 a month earlier, remaining under the 50-point line that separates expansion from contraction, a panel from the Istanbul Chamber of Industry and IHS Markit said.

The result was driven by a slowdown in output and new orders, the panel said.

The decline in the lira - which has lost around 40 percent of its value this year - was central to challenging business conditions and contributed to increasing inflationary pressures, with input and output costs increasing to the greatest extent since the survey began in 2005, it said.

“Events in currency markets impacted heavily on the Turkish manufacturing sector during August, causing a pick-up in inflationary pressures and a challenging demand environment. Meanwhile, new export orders rose for the second successive month in August, which is the key positive development revealed by the survey results,” IHS Markit associate director Andrew Harker said, commenting on the Istanbul Chamber of Industry Turkey Manufacturing PMI survey data.