Signs of easing pressure in Turkish manufacturing in Aug: S&P Global

Turkish firms continued to scale back employment and purchasing activity.

Meanwhile, the rate of input cost inflation quickened slightly, but output prices rose at the slowest pace in the year-to-date.

The headline Istanbul Chamber of Industry Turkiye manufacturing purchasing managers’ index (PMI) remained below the 50 no-change mark in August, but picked up to 47.3 from 45.9 in July.

The latest reading pointed to a solid moderation in business conditions in the sector, albeit one that was the least pronounced since April.

A subdued demand environment meant that new orders continued to soften in August, although the pace of moderation eased to the weakest since February, a release from S&P Global said.

New export orders also slowed, and to a larger extent than total new business. In line with the picture for new orders, production also moderated to a smaller degree than was the case in July.

In fact, the slowdown in output was the weakest in six months. Production has now softened on a monthly basis in each month since April 2024.

Employment in the Turkish manufacturing sector was scaled back to the greatest degree since April 2020 as firms reacted to lower workloads.

Meanwhile, stocks of finished goods were depleted for the second month running. Input costs increased sharply in August, and at a slightly faster pace than in July.

Respondents mainly linked higher input prices to currency weakness. The impact of a depreciation of the lira on raw material costs meant that manufacturers also increased their selling prices during August. The pace of inflation here was only modest and slowed to the weakest this year till now.

ALCHEMPro News Desk (DS)