An ongoing moderation in Turkish manufacturing gained traction in August as firms faced challenges in securing new business, according to survey data presented with the latest Istanbul Chamber of Industry Türkiye Manufacturing Purchasing Managers’ Index (PMI).

“The headline PMI posted 49.0 in August, from 49.9 in July, below the 50.0 no-change mark for the second month running and thereby signalling a further slowdown in the Turkish manufacturing sector,” said survey compiler S&P Global. The reading of 49.0 is the lowest Turkey has seen in the year to date.

A key factor deterring customers from committing to new orders was strong price pressures, added S&P, noting that “input costs increased sharply, and at a pace that was only slightly softer than the 16-month high posted in July”.

The weakness of the Turkish lira against the dollar and rising wages were the main factors leading to higher input costs, it also noted.

Commenting on the PMI survey data, Andrew Harker, economics director at S&P Global Market Intelligence, said: "It was a familiar story for the Turkish manufacturing sector in August, with price pressures acting to restrict demand and leading to a general moderation of business conditions. Inflationary pressures did moderate somewhat in the latest survey period, but they remained elevated.

“The main positive element in the latest report was that firms continued to hire additional staff, although the rate of job creation was only fractional so it remains to be seen if this growth will continue should demand conditions remain subdued."