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Turkey PMI July 2021

Turkey: PMI reaches six-month high at the start of Q3

The Istanbul Chamber of Industry Turkey Purchasing Managers’ Index (PMI) rose from 51.3 in June to a six-month high of 54.0. As such, the index moved north of the neutral 50-threshold that separates an overall improvement from contraction.

The improvement in operating conditions reflected a nine-month sharp rise in output as Covid-19 restrictions were largely eased, effective 1 July. New orders rose at the strongest pace in just under a year as the loosening of restrictive measures boosted demand. Foreign demand expanded at an even quicker rate, thanks to the lifting of lockdown measures abroad. To keep up with demand, firms onboarded staff at an accelerated pace, while stepping up their purchasing activity. However, firms continued to report supply disruptions as a limiting factor. Supply disruptions will likely persist in the short term amid widespread uncontrolled wildfires. Supply-side issues in part drove input cost inflation as raw material prices increased, while currency weakness further pushed up input inflation. Consequently, firms raised their selling prices at a marked pace.

Andrew Harker, economics director at IHS Markit, commented:

“Firms showed themselves able to rebound quickly last year and appear to be on track to do so again, with sharper increases in employment and purchasing activity helping them to deal with rising workloads. With virus cases on the rise again, however, there may be concerns that growth plans could be hindered again in the months ahead.”

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