Turkey: Manufacturing business conditions continue to improve in September albeit at a softer pace
October 1, 2020
Operating conditions in Turkey’s manufacturing sector continued to improve through the end of the third quarter, albeit signs are emerging that momentum is waning. In September, the Istanbul Chamber of Industry Turkey Purchasing Managers’ Index (PMI) declined from 54.3 in August to 52.8. Despite the dip, the headline figure remained above the neutral 50-threshold that separates expansion from contraction in business activity.
September’s reading reflected a softer increase in both output and new orders. That said, firms raised their staffing levels at the fastest pace since February 2018 in line with the continued rise in new orders. Regarding prices, input cost inflation accelerated to a near two-year high, fueled by ongoing currency weakness, which prompted manufacturers to hike output charges in turn.
Andrew Harker, economics director at IHS Markit, commented that “the key highlight from the latest PMI survey was strengthening job creation”. However, Harker noted that “rates of expansion in new orders and output have levelled off and the threat of the pandemic remains. Firms will be hoping that trends remain positive over the final quarter of the year to keep the recovery going”.