Activity in the Turkish manufacturing sector shrank for the sixth month running in August as demand contracted sharply, leading to a slowdown in output, Reuters reported, citing a business survey on Thursday.
Turkey’s Purchasing Managers’ Index (PMI) for manufacturing stood at 47.4 in August, ticking up from 46.9 in July, the Istanbul Chamber of Industry and S&P Global said, but staying below the 50-point line that divides growth from contraction.
New orders slowed at the sharpest rate since May 2020, when coronavirus measures were in place around the world, the survey showed, as contributors cited a lack of demand, price rises and weakness in the global economy as reasons for the easing.
Manufacturing output slowed amid challenging market conditions and high prices, although the rate of moderation eased slightly compared to the previous month.
Higher costs for raw materials, transportation and energy, a rise in Turkey’s minimum wage and currency weakness contributed to increases in input and output prices although the rate of inflation eased in both, the survey said.
Despite weakening demand and the slowdown in orders, manufacturers hired more staff, with the rate of job creation picking up to a three-month high, it also said.
“While output moderated to a lesser extent in August, the trend in new orders was more concerning as new business slowed … Market conditions are clearly challenging at present,” said Andrew Harker, economics director at S&P Global Market Intelligence.
“One area of respite for firms is that their cost pressures continued to fade in August. The slowest rise in input prices in over two-and-a-half years fed through to a softer rise in charges. Less pronounced price rises may help to limit the slowdowns in demand over the months ahead.”