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Turkey PMI October 2019

Turkey: Manufacturing PMI inches down in October

Activity in the Turkish manufacturing sector slowed slightly in October, with the sector’s Purchasing Managers’ Index (PMI) moderating to 49.0 from 50.0 in September. The index, which is produced by IHS Markit and sponsored by the Istanbul Chamber of Industry, thus retreated into contractionary territory.

The slight deterioration in the manufacturing sector’s health in October came on the back of a moderate slowdown in output and softer new orders inflows. The latter was driven by weaker domestic and foreign demand, and production was scaled back as a consequence which in part drove a further reduction in backlogs of work. On the other hand, firms continued to increase head counts, with employment rising back-to-back for the first time in nearly two years. In terms of prices, input costs rose due to the weaker currency and higher electricity costs. Yet as the rate of inflation was relatively subdued, firms cut their output prices for the second month running in a bid to spur demand.

Andrew Harker, associate director at IHS Markit, commented that “the recent upward trend in the PMI figures took a pause in October, highlighting that market conditions in the Turkish manufacturing sector remain challenging.”

Meanwhile, the capacity utilization rate for the sector was virtually unchanged, rising from 76.3% in September to 76.4% in October.

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