Turkey: Manufacturing operating conditions improve at weaker pace in November
Operating conditions in the Turkish manufacturing sector continued to improve midway through the fourth quarter, albeit at a softer pace as the Istanbul Chamber of Industry Turkey Purchasing Managers’ Index (PMI) dropped to 51.4 in November from 53.9 in October. However, the headline reading remained north of the neutral 50-threshold that separates an overall expansion from contraction in business activity.
The downtick came on the back of softer output and new orders growth amid the second wave of Covid-19, leading to severely disrupted supply chains. Furthermore, external demand also eased, with new export orders growth slowing. More positively, job creation continued apace due to the solid recovy in workload over the recent months. In fact, employment increased for the sixth month running. Turning to prices, the ongoing weakness of the Turkish lira continued to weigh on price pressures, with both input and output costs rising steeply.
Andrew Harker, economics director at IHS Markit, commented:
“A resurgence of the COVID-19 pandemic acted to take the wind out of the Turkish manufacturing sector’s sails in November, with demand suffering. That said, the sector has shown before that it can rebound quickly from disruption caused by the pandemic, and firms were confident enough in the outlook to maintain job creation during the month.”