PMI is a composite single-figure indicator of manufacturing performance. It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases. Any PMI figure higher than 50 points denotes overall expansion.
“The Turkish manufacturing sector stepped up a gear in May,” Trevor Balchin, a senior economist at IHS Markit, said in comments on the survey results.
The May figure pointed to an acceleration in Turkish manufacturing growth driven by sharper gains in output, new orders and employment. Pressure on capacity was evident as suppliers’ delivery times lengthened and backlogs rose at the fastest rate since June 2006 - firms partly fulfilled orders by selling directly from stock. Meanwhile, input price pressures eased further during May.
Output in Turkish manufacturing industry increased in May at the fastest rate since February 2014, while the growth of new work hit a 42-month record. PMI data also signalled that domestic demand had strengthened, while new export orders increased at the second-fastest rate in over three years.
Turkey’s PMI has remained above its long-term trend level of 50.7 over the three months since February.
Manufacturing employment increased at the fastest rate since February 2015, the latest indices also showed, while the capacity utilisation rate (CUR) of the Turkish manufacturing sector rose to 78.8% in May, the highest figure recorded since August 2013, according to a survey previously released by the central bank.
Turkey’s calendar-adjusted industrial production index moved up by 2.8% y/y in March, marking the best growth in output recorded since May 2016. The seasonally-adjusted industrial production index has posted annual growth for six consecutive months running from October 2016 to March this year.