Turkish manufacturing sector continues to shrink in September
Türkiye’s manufacturing sector continued to contract for the sixth straight month in September, with output, employment and purchasing activity all falling due to a sharp drop in new orders, a survey by the Istanbul Chamber of Industry and Standard & Poor’s Global showed, showing a further deterioration in the industrial sector.
According to the survey, the Turkish manufacturing Purchasing Managers’ Index (PMI) fell to 44.3 points in September from 47.8 in August, well below the 50-point threshold that separates growth from contraction.
The sector also recorded its worst decline in new orders in about four-and-a-half years due to weak overall demand.
As a result, output contracted by the largest amount since May 2020, while employment levels recorded their largest decline since April 2020.
The decline in purchasing activity also led to a decline in stocks of raw materials and finished goods.
Although input cost inflation eased to a three-month low, it remained significant, affected by a weaker currency and higher raw material prices, which led to a continued increase in output prices.
Commenting on the situation, Andrew Harker, Director of Economics at S&P Global Market Intelligence, said, “The latest PMI data paints a worrying picture for the Turkish manufacturing industry… The sector is entering a deeper downturn towards the end of the third quarter”.
Harker added that weak demand is the main factor pushing companies to reduce production, employment and purchasing activity, which puts further pressure on the sector.
