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Turkey PMI October 2021

Turkey: Manufacturing conditions improve at a softer pace in October

Conditions in Turkey’s manufacturing sector improved at a reduced speed at the outset of the fourth quarter, with the Istanbul Chamber of Industry Turkey Purchasing Managers’ Index (PMI) dropping to 51.2 in October from 52.5 in September. That said, the index remained above the neutral 50-threshold that separates an overall improvement in manufacturing conditions from a deterioration over the prior month.

The downtick was driven by easing production and new orders. Output levels were scaled back amid difficulties obtaining raw materials and unfavorable exchange rate developments. Supply bottlenecks also weighed on demand, as a lack of electric components particularly dragged on new orders. This was, however, mainly a story of weakening domestic conditions as new export orders expanded at a solid pace. Input prices increased sharply due to material shortages and currency weakness. In turn, output prices were raised at the steepest pace since September 2018.

Andrew Harker, economics director at IHS Markit, commented:

“Where firms can source items, they are having to pay increasingly high prices, with inflationary pressures added to by currency weakness. The fourth quarter therefore looks to be one filled with headwinds for firms, although one positive from the latest PMI survey was that new export orders continued to rise.”

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