Turkey’s Manufacturing Purchasing Managers' Index (PMI) edged down from 55.6 in February to 51.8 in March, the lowest level recorded since April 2017, IHS Markit said on April 2.

Index figures higher than 50 indicate an overall improvement on the index. Turkey’s Manufacturing PMI has been higher than 50 for 13 months in a row since March last year after staying lower than 50 in the previous 12 months from March 2016 to February 2017. The index saw 55.7 in January, which was the highest level recorded since March 2011, before posting declines in Februay and March.

“Business conditions in Turkey’s manufacturing sector continued to improve in March, albeit at a slower pace compared to the previous survey period. Underpinning the sustained expansion were higher volumes of output, new orders and employment”, Gabriella Dickens, an economist at IHS Markit, said of the latest data.

Fears that Turkey’s economy is overheating intensified on March 29 as 4Q GDP growth for last year came in at 7.3% y/y with the full-year 2017 expansion given as 7.4% after 3Q GDP was revised up 0.2pp to 11.3%.

Turkey’s manufacturing boom has been substantially founded on the government's TRY250bn ($53bn) credit guarantee fund (CGF) for backstopping bank loans to businesses. Following the failed coup and the brake it put on economic growth, Turkey spurred the economy by upping spending across the board, hiking wages, pouring capital into investments and guaranteeing loans with the CGF.