Turkey: Manufacturing PMI records worst reading since December 2022 in July
The Istanbul Chamber of Industry Manufacturing Purchasing Managers’ Index (PMI) came in at 49.9 in July, down from June’s 51.5. July’s print marked the weakest reading since December 2022. As a result, the index dropped below the 50.0 no-change mark, signaling a deterioration in manufacturing sector operating conditions from the previous month.
July’s decline was chiefly caused by strengthening inflationary pressures. Input costs rose sharply due to lira weakness and wage pressures, which prompted firms to increase output charges at the sharpest rate in 16 months. Consequently, demand weakened, leading to a slowdown in new orders, which in turn drove firms to scale back their purchasing activity. Meanwhile, output remained broadly unchanged, supported by a continued recovery from the earthquake. Lastly, employment levels increased for the third consecutive month, but at a soft rate.