Growth momentum picked up in Turkish industry during March, with the headline purchasing managers’ index (PMI) for manufacturing rising to 50.9 from 50.1 in February.

That signalled a modest monthly improvement in business conditions in the manufacturing sector as measured by the Istanbul Chamber of Industry PMI published by S&P Global. On the index, anything above 50.0 indicates an improvement.

Responding to the survey data, Andrew Harker, economics director at S&P Global Market Intelligence, said: "Renewed output growth in the Turkish manufacturing sector was a welcome development in March following the marked impact of the earthquake in February.

“Although some firms were still affected, the start of reconstruction efforts supported the overall return to growth. With new orders also up, we are hopefully seeing an end to the relatively soft conditions experienced by firms over the past year or so."

Rates of inflation and supply-chain disruption in Turkish manufacturing showed signs of easing, said S&P.

It added: “Operating conditions strengthened to the greatest extent since December 2021. Central to the improvement in the overall health of the sector were renewed expansions in output and new orders during March.

“Manufacturing production increased for the first time in 16 months. Some firms continued to face disruption as a result of February's earthquake, but others reported having restarted production. Reconstruction efforts in the affected regions also led to higher output in some cases. New orders, meanwhile, returned to growth for the first time in a year-and-a-half as new business increased solidly over the month. A similar pace of expansion was seen for new export orders, which rose for the first time in a year.”

Despite the increase in production requirements, manufacturing employment in March dipped for the first time in five months, in part due to the earthquake but also as a result of Turkey’s new early retirement law.

Manufacturers remained able to deal with new order inflows and work through outstanding business, but there were some signs of capacity pressures emerging as the rate of depletion in backlogs of work was the softest in 13 months, S&P also noted.

It also advised: “Both input costs and output prices rose sharply again in March amid higher raw material costs, currency weakness and increased wages. In both cases, however, the rate of inflation eased from February.

“There were also signs of supply-chain disruption alleviating. Lead times lengthened for the third month running, but with the amount of earthquake-related disruption easing since February the rate of deterioration in vendor performance was only marginal.”