Turkey: Tentative sign of turnaround in Turkey’s manufacturing sector in September
The Istanbul Chamber of Industry and IHS Market’s manufacturing Purchasing Managers’ Index (PMI) rose from 46.7 in August to 50 in September. The index thus showed a stabilization in operating conditions in September after 17 consecutive months in which conditions worsened.
September’s improvement came on the back of the first increase in new orders in a year-and-a-half; domestic new orders rose marginally while export orders dropped. Amid a still-challenging environment, output was unchanged despite anecdotal evidence highlighting that some firms stepped up production. Despite this, goods-producers were hesitant to increase their stock levels, and purchasing activity fell as a consequence. Furthermore, employment rose for the first time in over a year. That said, the pace of job growth was marginal. In terms of prices, input price costs eased for the fourth consecutive month despite currency weakness driving up costs. Due to softness in input price inflation, output prices were reduced for the first time in eight months.
Andrew Harker, associate director at IHS Markit, commented that if the current trajectory were to continue, “the signs are that the final quarter of 2019 could see growth solidify and provide some welcome good news for firms after a challenging period.”
In contrast to the stabilization of operating conditions, the Central Bank’s capacity utilization rate for the sector fell from 76.6% in August to 76.3%.