Turkey: Manufacturing PMI ticks up slightly in December
The Istanbul Chamber of Industry Turkey Purchasing Managers’ Index (PMI) rose fractionally from 52.0 in November to 52.1 in December, signaling a fairly stable improvement in business conditions from the prior month. As such, the index remained above the neutral 50-threshold that separates an overall improvement from a deterioration in conditions.
The uptick came on the back continued job creation as employment rose for the 19th month in a row and at the fastest pace since August. Higher staff numbers were linked to efforts to increase capacity. That said, steep inflationary pressures held back the headline improvement, with output prices increasing at a steep pace in tandem with rising input costs. The rate of inflation surpassed the previous record from September 2018, likely due to the depreciating lira. The record increase in output prices deterred clients, with total new orders growth moderating as a consequence. This came despite continued growth in export sales as the lira depreciation has made Turkish goods more competitive. Furthermore, production and purchasing activity were scaled back due to currency pressures.
Andrew Harker, economics director at IHS Markit, commented:
“Alongside the potential issues caused by the emergence of the Omicron variant of the Covid-19 pandemic, the sector begins 2022 in a challenging position.”