Turkey: Manufacturing PMI falls to record-low in April
Business conditions in Turkey’s manufacturing sector deteriorated strongly, with the Istanbul Chamber of Industry Turkey Manufacturing Purchasing Managers’ Index (PMI) falling to 33.4 in April from 48.1 in the prior month. This marked the steepest deterioration since the global financial crisis, as Covid-19 has drastically altered the economic outlook.
The marked drop in the headline index came on the back of record-steep drops in output and new orders, leading to contracting employment and purchasing activity. This came on the back of firms shutting down amid government measures to curb the spread of the virus. Moreover, new export orders suffered due to worldwide government-imposed restrictions and lockdowns. Meanwhile, input costs continued to rise in April due to lingering lira weakness; however, the rise in costs was the softest in three months. Consequently, output prices were raised, although discounts were announced to retain business.
Commenting on the data, Andrew Harker, economics director at IHS Markit, which produced the index, stated: “The April PMI data provide a sobering insight into the dreadful impact the COVID-19 pandemic and associated lockdown measures had on the Turkish manufacturing sector during the month.”
The sector’s capacity utilization rate, meanwhile, sank from 75.3% in March to 61.6% in April—an over one decade low.