Turkey: Manufacturing PMI stabilizes, remaining in contractionary territory in May
The ICI Manufacturing Purchasing Managers’ Index (PMI) was stable at April’s 49.2 in May. As a result, the index remained below the 50.0 no-change threshold, signaling a deterioration in business conditions compared to the previous month.
The print was driven by still-muted demand dynamics offsetting easing supply-chain issues and inflationary pressures. Growth in output and new orders both fell in the month, but tentative signs of a rebound appeared: The pace of their moderations slowed. On the other hand, new export orders slowed to a two-year low. A loss of economic momentum in Europe was unable to offset the impact of a weaker Turkish lira, making exports more competitive. Even so, staff levels rose for the 24th month running in a bid to increase productive capacity. Backlogs of work were consequently reduced. Looking at prices, the rate of input price inflation moderated to an over one-year low despite a sharp increase in material prices and exchange rate volatility. Output prices rose at a softer pace than in the month prior.
Andrew Harker, economics director at S&P Global, commented:
“There were some signs that doing business might start to get easier soon. In particular, supply chain constraints were the least pronounced since September 2020.”