Turkey: PMI drops in September; conditions still improve
The Istanbul Chamber of Industry Turkey Purchasing Managers’ Index (PMI) fell to 52.5 in September from 54.1 in August. However, the index remained comfortably above the neutral 50-threshold that separates an overall improvement in manufacturing conditions from a deterioration over the prior month.
The downtick was driven by milder increases in output and new orders, although a marked rise in new export orders supported total new business volumes. Despite the softening, continued growth in new orders and efforts to increase capacity drove firms to raise their headcounts. Nonetheless, backlogs of work rose for the first time in 14 months. Firms also stepped up their purchasing activity to keep up with output requirements and to create a safety buffer amid ongoing supply chain disruptions. Turning to prices, input costs rose on the back of higher raw material prices amid supply shortages and currency weakness. Consequently, output prices also increased.
Andrew Harker, economics director at IHS Markit, commented:
“There were some signs that supply chain disruption is not as pronounced as earlier in the year, but firms still had to face longer lead times and sharp price rises when attempting to secure inputs. As part of efforts to guard against these problems, stocks of purchases were raised to the greatest extent since the end of 2017. This should provide some assistance to efforts to keep on top of workloads in the months ahead.”