Turkish manufacturing growth slows down: PMI data

ISTANBUL - Hürriyet Daily News

Turkish manufacturing growth continued losing momentum in January, despite remaining solid thanks to new orders, the latest PMI survey data has revealed.

The HSBC Manufacturing Purchasing Managers’ Index (PMI), compiled by Markit, slipped to 52.7, falling further from November’s peak of 55, data announced Feb. 3 showed.

The PMI remained above the no-change mark of 50.0 for the sixth month in succession in January, pointing to a sustained overall improvement in business conditions at Turkish goods producers, the survey note read.

However, the monthly change in the index, which had accrued up to 53.5 in December, indicated the slowest monthly expansion since August, despite being above the survey’s long-run average.

“Manufacturing conditions in Turkey improved in January, but at a slower pace compared to the previous month. Output, new orders and new export orders were all in expansion territory, but all three indices moderated from their December levels,” Meli Metiner, a HSBC economist, has said.

According to Markit, domestic demand drove the overall increase in new work, as new export orders rose only fractionally during January. January data also signaled a remarkable acceleration in cost pressures at Turkish goods producers. The rate of input price inflation was the fastest since March 2011, and the extent of the pick-up since December was the second-greatest over the survey history, the survey note said.

“With regards to the production outlook, rising loan rates and a weaker Turkish Lira are likely to slow domestic demand, while foreign demand is likely to be more resilient in 2014. With regards to the inflationary outlook, cost-side pressures are likely to persist until the lira stabilizes,” Metiner also said.