Turkish manufacturing PMI rises in October: Survey

ISTANBUL

The Istanbul Chamber of Industry’s (İSO) Türkiye Manufacturing Purchasing Managers’ Index (PMI) increased from 44.3 in September to 45.8 in October.

The index remained below the 50 no-change mark, indicating a continued moderation of business conditions during the month.

Turkish manufacturers continued to face a challenging environment as the final quarter of the year got underway, although rates of moderation in output, new orders, purchasing activity and employment softened since September, the survey said.

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

Stocks of purchases meanwhile were scaled back to the largest extent in almost four and a half years. On the price front, both input costs and output prices rose at softer rates, it added.

Market conditions remained challenging, leading to muted demand and further slowdowns in total new orders and exports, according to the monthly survey.

“In turn, manufacturers scaled back production for the seventh month running. In all cases, however, rates of moderation softened from September,” it noted.

Employment and purchasing activity were also scaled back in response to muted new orders, although in some cases firms reported that voluntary resignations had caused a drop in staffing levels.

Inflationary pressures continued to soften at the start of the final quarter of the year, said the report, adding that input costs rose markedly, but at the softest pace for almost a year and a half, the survey also found.

The pace of output price inflation also eased in October.

“Currency weakness remained a key factor leading to higher costs. Meanwhile, higher prices for raw materials such as wheat were mentioned, alongside increased transportation costs,” it said.

Suppliers' delivery times lengthened in October following a first improvement in vendor performance for nine months during September, according to the survey.

However, the latest data signaled only a modest lengthening of lead times.

"Although rates of moderation in a range of key variables such as output, new orders and employment softened in October, the latest data showed that the Turkish manufacturing sector remained under pressure due to challenging demand conditions,” commented Andrew Harker, economics director at S&P Global Market Intelligence.

"On a more positive note, inflationary pressures eased again, at least reducing the impact of this particular headwind to growth,” Harker said.