Turkish manufacturers continued to face subdued market conditions as the second half of the year got under way with July, according to the Istanbul Chamber of Industry Türkiye Manufacturing Purchasing Managers Index (PMI) for the month, released on August 3.

The headline PMI rose to 47.7 in July from 47.1 in June but nevertheless remained below the 50.0 no-change mark, signalling a further clear decline in the health of Turkey’s manufacturing sector. Business conditions have now deteriorated in 28 successive months. New orders slowed markedly again in July, albeit at a slightly weaker pace than in June.

Andrew Harker, economics director at PMI compiler S&P Global Market Intelligence, said: "The second half of 2026 began in much the same way as the first half ended, with Turkish manufacturers struggling to generate growth amid a muted demand environment, exacerbated by the war in the Middle East.

“Manufacturing production did at least moderate to a lesser degree than in June, signalling a more stable picture. Also positive was a further easing in the rate of input cost inflation which provided some breathing space for firms to limit rises in selling prices in order to try to stimulate demand."

The war in the Middle East meant that international demand for Turkish manufactured goods waned at the start of the third quarter, S&P reiterated.

Challenging market conditions led manufacturers to scale back production for the second month running, but only modestly, it added.