Turkey's manufacturing growth remained strong in September although the country's Manufacturing Purchasing Managers' Index (PMI) declined to 53.5 from August's 77-month high of 55.3, IHS Markit said on October 2.

Turkey’s manufacturing boom has very much been founded on the government's TRY250bn ($72bn) credit guarantee fund (CGF), now almost depleted. The capacity utilisation rate (CUR) of Turkish manufacturing industry edged up to 79% in September from 78.8% in August. GDP growth will probably be around 5.5% this year, exceeding the government target of 4.4%, Turkish Economy Minister Nihat Zeybekci said on September 11 after the latest data showed that the Turkish economy expanded at 5.1% y/y in the second quarter of 2017.

Turkey's manufacturing PMI has remained over the 50-mark, which is the borderline between improvement and deterioration, since May, and the index signalled the seventh successive month of improvement in manufacturing operating conditions in September, the longest period of consecutive growth since 2014.

 “The Turkish manufacturing sector reached the end of the third quarter on a strong footing. Improvements in overall business conditions were sustained in September with solid overall expansions in output, employment and purchases,” Gabriella Dickens of IHS Markit said.

The upturn was driven in part by solid growth in new orders, IHS Markit said. In turn, firms scaled up output, purchasing and employment. Additionally, recruitment eased the pressure on manufacturers’ capacity and enabled companies to work through their backlogs. The latest survey data also revealed a slight weakening of inflationary pressures in the sector.

The upturn was supported by robust demand for Turkish-manufactured goods. Firms benefited from strong inflows of new work and raised output accordingly. New export business also increased further, though at a slower rate than that for total new orders.