The headline purchasing managers’ index for Turkish manufacturing for September signalled a sustained improvement in business conditions, but also evidenced signs of rates of improvement in demand losing strength, survey compiler IHS Markit and the Istanbul Chamber of Industry said on October 1.

The index posted 52.8 in September, down from August’s 54.3. Any figure above 50.0 denotes an expansion.

Andrew Harker, economics director at IHS Markit, said: “The key highlight from the latest PMI survey was strengthening job creation. A sustained period of improving demand means that manufacturers are willing to invest in rebuilding workforces following the COVID-19 downturn.

“That said, rates of expansion in new orders and output have levelled off and the threat of the pandemic remains. Firms will be hoping that trends remain positive over the final quarter of the year to keep the recovery going.”

Industrial production “accelerating”

Liam Peach at Capital Economics said: “Turkey’s PMI fell for a second month in a row from 54.3 in August to 52.8 in September. That said, the PMI remains high by past standards and points to industrial production accelerating from +4.4% y/y in July to 10% y/y in September.

“There was another sharp increase in the input and output prices balances to two-year highs, probably reflecting the further depreciation in the lira. The central bank is likely to tighten monetary conditions further, which will take some of the heat out of the recovery.”

IHS Markit said some firms indicated that a weaker currency had aided their competitiveness in export markets.

“Stocks of purchases ticked down, however, amid reports of continuing caution around stockbuilding and the use of inputs to support output growth,” it added.