Turkey: Manufacturing activity nosedives in April
Manufacturing conditions worsened sharply in April, with the Purchasing Managers’ Index (PMI), produced by the Istanbul Chamber of Industry (ICI) and IHS Markit, sinking to 48.9 from 51.8 in March. As a result, the index fell below the crucial 50-point threshold that separates expansion from contraction in the manufacturing sector for the first time since February 2017.
The fall in the index came on the back of lower new orders and employment, with firms citing greater market uncertainty amidst high inflation, a volatile lira and upcoming elections. In addition, input prices were elevated, with firms consequently raising output prices. On the other hand, output grew for the 15th straight month—albeit at a reduced rate—while new export orders increased sharply, likely buoyed by the weaker currency and strong regional demand. According to the Central Bank, the manufacturing sector’s capacity utilization rate fell to 77.3% in April from 77.8% in March, further indicative of a slowdown in activity.