PMI data shows Turkish manufacturing sector could soon be set for return to growth says S&P

PMI data shows Turkish manufacturing sector could soon be set for return to growth says S&P
/ S&P Global Market Intelligence
By bne IntelIiNews February 1, 2023

The Turkish manufacturing sector could soon be set for a return to growth, according to S&P Global Market Intelligence.

The conclusion, it said, can be drawn from the January survey data gathered by the Istanbul Chamber of Industry Türkiye Manufacturing Purchasing Manager’s Index (PMI).

“Business conditions were stable in January, while the upward trajectories of the output and new orders indices amid signs of demand improving provide hope that expansions can be recorded in the coming months,” said Andre Harker, economics director at S&P Global Market Intelligence.

"While rates of input cost and output price inflation did pick up due to the rise in the minimum wage, they remained some way below the highest points seen in 2021 and 2022," he added.

The headline PMI for Turkish manufacturing in January moved back above the 50.0 no-change mark, ending a 10-month sequence of sub-50 readings.

At 50.1, the index was up from 48.1 in December and signalled broadly stable business conditions in the sector, said S&P.

Both output and new orders moderated to much lesser extents than seen in December as some firms pointed to signs of demand improving, it added.

“Output eased to the least degree in 14 months, while the slowdown in new orders was the softest in the current sequence of moderation which began in October 2021,” S&P also noted.

The pace at which new export orders eased also softened in January, but remained solid and more pronounced than that seen for total new business, the survey data showed.

Input prices rose at the fastest pace in six months, with higher raw material costs and currency weakness adding to overall cost burdens, it also concluded. “In turn, firms also raised their own selling prices, and at the fastest pace since June 2022,” S&P said.