Production index shrinks most since April 2009

ISTANBUL

Turkey’s manufacturing activity contracted in March 2015 by the most in nearly six years, due to a steep drop in output and longer supplier delivery times, the results of a survey by Markit Economics and HSBC Bank have shown.

The HSBC manufacturing purchasing managers’ index (also known as PMI) dropped to 48 in March from 49.6 in February. A reading under 50 indicates a contraction in the sector.

The latest reading was the lowest since April 2009 and indicative of an overall deterioration in operating conditions.

New orders fell for the third straight month in March and the pace of contraction was the sharpest since August 2011. Similarly, new export orders also declined further, despite the weakening of the Turkish Lira against the U.S. dollar.

Manufacturing output declined at its highest rate since April 2009, due to weakening inflows of new work. Employment in the manufacturing sector stagnated in March, ending a sequence of continuous job creation in the sector that stretched back to June 2009.

On the price front, input price inflation has accelerated sharply, its fastest since March last year, caused by the strengthening of U.S. dollar. This has forced manufacturers to increase selling charges at their fastest rate since April 2014.