October PMI shows Turkish manufacturers scaling back production amid contracting demand

October PMI shows Turkish manufacturers scaling back production amid contracting demand
/ S&P Global
By bne IntelliNews November 1, 2023

Turkish manufacturers struggled in a challenging demand environment in October, with new orders increasingly difficult to secure, causing the headline Istanbul Chamber of Industry Türkiye Manufacturing Purchasing Managers Index (PMI) to drop to 48.4 from September’s 49.6, S&P Global said on November 1.

The index posted below the 50.0 no-change mark for the fourth consecutive month.

Production was scaled back and firms also acted to lower their employment and purchasing activity, S&P said.

It added: “Widespread demand weakness, both domestically and internationally, was signalled by manufacturers in October. As a result, total new orders and new export business moderated over the course of the month.

“Moreover, total new business slowed to the largest degree since last November. In line with the picture for new orders, production continued to be scaled back in October.”

The October data signalled a renewed reduction in employment that ended a five-month sequence of manufacturing job creation.

S&P noted that inflationary pressures continued to wane at the start of the final quarter of the year, with rates of growth in input costs and output prices each easing for the third successive month. “Where prices did rise, this was often linked to currency weakness,” it added.

Andrew Harker, economics director at S&P Global Market Intelligence, said: "Demand conditions were the main limiting factor on the Turkish manufacturing sector in October, with firms struggling to secure sufficient volumes of new orders to support production and maintain staffing levels.

“There was some further respite in terms of inflation, however, which may provide some grounds for optimism that an improved demand environment can become established soon.”