Second virus wave ‘took wind out of Turkish manufacturing’s sails in November latest PMI shows’

Second virus wave ‘took wind out of Turkish manufacturing’s sails in November latest PMI shows’
By bne IntelIiNews December 1, 2020

An easing in the pace of recovery in the Turkish manufacturing sector during November amid a second wave of the coronavirus (COVID-19) pandemic is reflected in the latest headline purchasing managers’ index (PMI) data from the Istanbul Chamber of Industry and IHS Markit.

The manufacturing PMI posted 51.4, down from 53.9 in October. Any reading above 50.0 signals an improvement in business conditions but the November score was the lowest since Turkish industry in June began its recovery from the COVID-19 related downturn.

Andrew Harker, economics director at IHS Markit, said: “A resurgence of the COVID-19 pandemic acted to take the wind out of the Turkish manufacturing sector’s sails in November, with demand suffering. That said, the sector has shown before that it can rebound quickly from disruption caused by the pandemic, and firms were confident enough in the outlook to maintain job creation during the month.

“There were also some positive signs on the inflation front, with rates of increase in input costs and output prices down slightly on those seen in October. With the Turkish lira gaining some ground recently, we could see a further moderation of inflation in the months to come.”

New orders eased but hiring up

IHS Markit said Turkish manufacturing output and new orders eased in November, but firms continued to expand their staffing levels in response to the strong rebound in workloads seen in recent months.

New export orders also slowed. “In all cases, however, the rates of moderation were much weaker than those seen during the worst of the first wave of the pandemic earlier in 2020,” IHS Markit said.

It also noted: “The COVID-19 pandemic had an increasingly severe effect on supply chains in November, with lead times lengthening to the third-largest extent in the survey’s history. This contributed to a drop in stocks of purchases, as did a slight scaling back of purchasing activity in response to reduced output requirements.

“The recent weakness of the Turkish lira against the US dollar was the main factor behind further sharp increases in both input costs and output prices. That said, in both cases the rates of inflation were down slightly on those seen in October.”