Turkish industry growing, albeit slow: PMI data

ISTANBUL

Turkish manufacturing sector has raised both output and new orders in December, PMI data reveals. DAILY NEWS photo

Turkey’s manufacturing sector continued to grow last month despite losing momentum, while eurozone manufacturing grew at its fastest rate since mid-2011, a survey showed on Jan. 2.

Markit’s Turkey Manufacturing Purchasing Managers Index (PMI) data dropped to 53.5 in December from a 32-month high of 55 of November, signaling a slight slowdown in the growth rate. However, any reading above 50 indicates that both output and new orders are expanding. Turkey’s manufacturing companies reported a further rise in production in December 2013. Although down since November 2013, the pace of expansion was above the long-run series average.

New orders also increased at a weaker, but still solid rate, with companies reporting higher activity in the auto sector and improving market conditions.

Concurrently,analysts linked growth in new export business to stabilizing conditions in Egypt and the securing of new clients.

“Manufacturing growth in Turkey picked up pace in the fourth quarter despite significant market volatility. Official data also bear this out, to a certain extent,” said Melis Metiner, an economist at HSBC, commenting on announced figures.

Sharing also the prospects for 2014, the analyst said: “Looking forward to 2014, we would expect to see some deceleration in domestic orders as household spending slows on the back of higher interest rates and a weaker lira. But the foreign demand outlook is set to improve next year, which could support exporters’ performance.”
 
Eurozone industry gains pace

Meanwhile, fueled by brisk business in Germany and Italy, eurozone manufacturing grew at the fastest rate since mid-2011 in December 2013, setting the stage for a solid start to the year after a tumultuous 2013.

PMI data for the zone rose to 52.7 in December from November’s 51.6, confirming an early estimate and marking its best reading in 31 months. New orders piled in at the fastest pace since April 2011, and a near two-year stretch of job cuts across eurozone factories almost came to an end last month.
Looking at individual countries, the mood was largely positive, with the exception of France.

Manufacturing activity in the eurozone’s second largest economy hit a six-month nadir last month. The weakness of eurozone inflation, at just 0.9 percent in November, has caused concern among policymakers at the European Central Bank. The latest PMIs suggest that disinflationary forces from manufacturing may have peaked.