The moderation of the Turkish manufacturing sector became more pronounced at the end of the third quarter as it saw the sharpest slowdown in new orders since May 2020, a closely watched survey revealed on Tuesday.
The country’s factory activity contracted for the sixth straight month in September as output, new orders, employment and purchasing all softened to larger degrees than in the previous survey period.
The headline Purchasing Managers’ Index (PMI) for Turkish manufacturing dropped to 44.3 in September from 47.8 in August, according to a survey by the Istanbul Chamber of Industry (ISO) and S&P Global.
The reading indicated a strong decline and remains below the crucial 50.0 threshold, separating growth from contraction.
There were widespread reports of demand weakness in September, leading to the sharpest slowdown in new orders in almost four-and-a-half years.
Subdued demand in international markets was also signaled by a renewed moderation in new export orders.
“Production eased in response to muted new order inflows, extending the current sequence of moderation to six months. Moreover, output was scaled back to the largest extent since May 2020,” the statement said.
Manufacturers saw their employment shrink in September due to lower output requirements.
The headline PMI is a composite single-figure indicator of manufacturing performance. It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases.
Commenting on the Istanbul Chamber of Industry Türkiye Manufacturing PMI survey data, Andrew Harker, Economics Director at S&P Global Market Intelligence, said the sector “moved deeper into its period of moderation” as many firms reported demand weakness.
“While inflationary pressures aren’t currently as severe as they have been in recent years, the still-marked increases in prices won’t be helping to improve the demand environment,” he said.
