Turkey: Manufacturing PMI soars in May
June 1, 2017
The Manufacturing Purchasing Managers’ Index (PMI) produced by the Istanbul Chamber of Industry (ICI) and IHS Markit rose notably from 51.7 in April to 53.5 in May, the best reading since December 2013. As a result, the PMI now lies further above the 50-point threshold that separates expansion from contraction in the manufacturing sector.
Operating conditions among Turkish manufacturers improved markedly in May on the back of steeper growth in output, new orders and employment. Firms noted a pick-up in domestic demand, while new export orders rose at the second-fastest pace in more than three years. Higher demand prompted companies to increase their staffing levels at the quickest rate since February 2015. Nonetheless, backlogs of work rapidly mounted through May as buoyed demand put capacity under further pressure. In fact, data from the Central Bank in late May had shown the manufacturing capacity utilization rate reaching a near four-year high of 78.8% in the same month. Meanwhile, a gradually strengthening lira continued to tame inflationary pressures, with input prices rising at the slowest pace in eight months.
Author: David Ampudia, Economist