Turkey: Manufacturing PMI signals sharper deterioration in September
October 4, 2022
The ICI Manufacturing Purchasing Managers' Index (PMI) dropped to 46.9 in September from 47.4 in August. As a result, the index fell further below the neutral 50-threshold separating an overall deterioration from an improvement in business conditions compared to the prior month.
The headline deterioration was driven by weakened demand dynamics amid elevated inflationary pressures, driving a slowdown in output and new orders. New orders moderated for the 12th straight month, and output slowed for the 10th month running. Meanwhile, employment decreased for the first time in over two years. Turning to prices, input price inflation rose sharply on the back of greater prices for natural gas, electricity and raw materials. Prolonged currency weakness also drove up price pressures. Greater input prices were passed on to consumers.
Andrew Harker, economics director at S&P Global, commented:
“The September PMI data provided few reasons for cheer for Turkish manufacturers […]. With manufacturers sitting on increasingly large finished goods inventories, the prospects for production over the coming months appear bleak.”