Turkey: PMI rises to a near one-year high, sector remains in contraction
July 1, 2019
The Istanbul Chamber of Industry and IHS Markit’s manufacturing Purchasing Managers’ Index (PMI) rose to 47.9 in June from 45.3 in May; while business conditions in the sector deteriorated for the 15th month running, they did so at the softest pace since July 2018.
The improvement in the headline figure came on the back of growth in new export orders driving a softer slowdown in total new orders. Simultaneously, output and employment fell at a softer pace, although anecdotal evidence suggests market conditions remained tough for manufacturers. Moreover, purchasing activity also moderated at a weaker pace as demand eased at a less sharp rate. In terms of prices, inflation eased but remained elevated as a weaker currency continued to drive sharp input cost burdens, which were passed on to customers.
Meanwhile, the Central Bank’s capacity utilization rate for the sector rose to 77.1% in June from 76.3% in May. This came on the back of upticks across the board, with a noticeable pick-up in the durable consumer goods subsector.
Author: Jan Lammersen, Economist