Turkey: Manufacturing PMI inches up in November but remains in contractionary territory
Business conditions in the Turkish manufacturing sector continued to deteriorate in November, albeit at a softer pace than in the prior month: The Istanbul Chamber of Industry Purchasing Managers’ Index (PMI) rose to 49.5 from 49.0 in October. The index, which is produced by IHS Markit, thus remained south of the neutral 50-threshold.
The uptick in the headline figure was reflective of an uptick in output for the first time in over a year-and-a-half while new orders moderated at a weaker pace. The softer decline in new orders masked still-fragile demand dynamics, however. Both foreign and domestic demand remained on feeble footing in the month. Moreover, this fed through to a further reduction in backlogs of work as well as declining staff levels. More positively, purchasing activity stabilized after falling for over a year and a half. Looking at prices, lower raw material costs reduced input price pressures; however, a weak lira continued to exert some upward pressure. The moderation in input cost inflation in part drove a moderation in output price inflation.
Andrew Harker, Associate Director at IHS Markit, commented that “the key highlight […] was a return to growth of production […]. Although only fractional, the rise demonstrates improved confidence among firms that market conditions are on an upward trajectory.”
Meanwhile, the capacity utilization rate for the sector rose from 76.4% in October to 77.2% in November.