Turkey: Manufacturing business conditions continue to improve in October
November 4, 2020
Turkey’s manufacturing sector continued to gain traction as operating conditions improved; the Istanbul Chamber of Industry Turkey Purchasing Managers’ Index (PMI) ticked up to 53.9 in October from 52.8 in September. As such, the headline figure moved further north of the neutral 50-threshold that separates expansion from contraction in business activity.
October’s uptick reflected sharper increases in new orders, while employment grew at a near three-year quick pace. Demand rose for the fifth month running, likely driven by the reopening of economies as new export orders also rose. Output, which rose strongly as a consequence, was also fueled by the strongest rate of onboarding since February 2018.
Turning to prices, input costs rose sharply on the back of ongoing lira weakness, which reached a fresh record low against the U.S. dollar on 30 October. As a result, output prices increased at an over two-year quick pace.
Andrew Harker, economics director at IHS Markit, commented:
“The recovery in the Turkish manufacturing sector remained on track in October […]. This positive picture is all in spite of ongoing currency weakness which is causing inflationary pressures to build.”
Author: Jan Lammersen, Economist