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Turkey PMI February 2022

Turkey: Manufacturing PMI moderates in January

The ICI Manufacturing Purchasing Managers’ Index (PMI) inched down to 50.4 in February from 50.5 in January, marking the lowest reading in nine months and highlighting that the Turkish manufacturing sector began the year on a tougher footing. That said, the index remained above the neutral 50-threshold that separates improving from deteriorating business conditions compared to the prior month.

Although the headline reading continued to point to improving business conditions, manufacturers faced a range of constraints. New orders growth eased for the fifth consecutive month, and by the greatest extent since May 2021. This came on the back of a continued rise in prices and market uncertainty hampering demand. More positively, new export orders returned to growth amid improving international demand; however, this was insufficient to offset the drop in domestic demand. Furthermore, energy outages in the month contributed to softer output growth. This, coupled with ongoing supply difficulties, drove the first increase in backlogs of work in four months. More positively, in an attempt to keep up with output requirements, firms increased payrolls again, marking 21 months of increases in a row. Turning to prices, input costs rose sharply in the month due to pricier raw materials, energy, transport and wages as well as currency weakness. Consequently, output prices rose markedly.

Andrew Harker, economist at IHS Markit, commented:

“The latest PMI data suggested that inflationary pressures may have peaked around the turn of the year, though cost increases remained sharp midway through the first quarter.”

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