Turkey: Manufacturing PMI continues to plunge in May
June 1, 2018
Manufacturing conditions worsened for the fourth straight month in May, with the Purchasing Managers’ Index (PMI), produced by the Istanbul Chamber of Industry (ICI) and IHS Markit, dropping from 48.9 in April to 46.4. As a result, the index moved further below the crucial 50-point threshold that separates expansion from contraction in the manufacturing sector.
The steep fall in the index came on the back of lower new orders, export orders, output and employment, with firms highlighting subdued demand and market fluctuations. However, lower orders enabled firms to trim backlogs of work and lessened capacity constraints. Price pressures remained elevated in May on a weaker lira, with higher input prices translating into higher output prices. Despite softening economic momentum, Central Bank figures showed that the manufacturing sector’s capacity utilization rate rose slightly from 77.3% in April to 77.9% in May.
Turkey Industrial Production ForecastFocusEconomics Consensus Forecast participants expect industrial production to rise 4.2% in 2018 and 3.7% in 2019.
Author: Oliver Reynolds, Economist