Turkey: Manufacturing PMI hits seven-month high in October
November 3, 2014
The HSBC Manufacturing Purchasing Managers’ Index (PMI) rose from 50.4 in September to 51.5 in October, which represented the highest level since March of this year. The PMI has moved further above the 50-threshold that separates expansion from contraction in business conditions.
October’s figure suggests that domestic demand was behind the monthly improvement, as both output and new orders expanded at stronger rates than in September, while new exports orders were broadly unchanged due to “geopolitical instability”. As a result of October’s better dynamics in the manufacturing sector, Turkish manufacturers continued to increase their hiring. HSBC analysts added that, “since the end of June, Brent oil prices have fallen by 24% in USD terms and 20% in Turkish lira terms. This is likely to push down both input and output price inflation further in the coming months. It is also good news for Turkey’s current account deficit. On the other hand, we continue to see downside risks for export growth in 2015. […] If European growth slows next year, as we expect it to, this may pose downside risks to Turkey’s export performance.”