Turkey's Manufacturing Purchasing Managers' Index (PMI) advanced further from 53.5 in May to 54.7 in June, reaching the highest level recorded since November 2013, IHS Markit said on July 3.

The 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 denotes overall expansion.

“New orders in June increased at the fastest rate since February 2011 which bodes well for Q3,” Trevor Balchin, a senior economist at IHS Markit, said in comments on the survey results. The recent strength of the PMI was corroborated by the latest official industrial production figures, which revealed annual growth of 6.7% back in April, according to Balchin.

Manufacturers supported workloads by increasing their purchasing activity at the fastest rate since February 2014, while the rate of job creation hit a 29-month high, the PMI survey also showed. Input price inflation slowed for the sixth successive month in June to the weakest since September 2016. Similarly, output price inflation moderated further to an eight-month low.

Calendar-adjusted industrial production growth hit a 20-month high in April and exports surged 16% y/y in May.

Turkey’s business confidence index rose 3% m/m to 112.4 in June, the highest level recorded since May 2014’s 113.5. The capacity utilisation rate (CUR) of Turkish manufacturing rose further to 79% in June, the highest figure recorded since August 2008’s 81.9%.

Leading indicators hint at a strengthening economic recovery in the second quarter, the central bank said on June 22 in the minutes of its latest Monetary Policy Committee (MPC) meeting. 

The indicators suggest that Turkey’s economic growth will be stronger in the second quarter than it was in the first, Deputy PM Mehmet Simsek noted on June 12, commenting on the latest GDP data. GDP growth accelerated to 5% y/y in the first quarter of this year from the 3.5% y/y expansion recorded in the previous quarter and the 1.3% y/y contraction posted for the quarter before that.