The Turkey PMI™ Manufacturing Index, issued by Istanbul Chamber of Industry and Markit, was at 52.8 points in October this year, down from September’s 53.5 points. Any figure greater than 50 indicates an overall improvement of the sector.
Although the headline figure eased slightly from the previous month, the figure signalled a solid overall improvement in business conditions in the Turkish manufacturing sector. The latest reading marked the eighth consecutive month of improving business conditions, the longest period of consecutive growth since 2014. Furthermore, the headline PMI remained well above its long-run trend level of 50.8.
A further rise in output was supported by robust demand for Turkish-manufactured goods. Businesses benefited from robust inflows of new work which was the result of favourable economic conditions and greater underlying demand. New export business also rose, though at a slightly slower rate than that for total new orders.
Firms reacted to higher demand by increasing their capacity. Notably, employment growth was observed for the ninth month in a row, and purchasing activity increased at a solid rate. As a result, outstanding business fell at the quickest pace since September last year. Furthermore, pre-production inventories at Turkish manufacturers rose, after having declined slightly in September.
Inflationary pressures increased at Turkish manufacturing firms in October. Increasing input costs were partially absorbed by firms, although output prices did rise sharply in line with cost burdens.
“Solid improvements were noted in the Turkish manufacturing sector again in October, as output and new business from both domestic and foreign channels grew. Buoyed by this, firms by increased their capacity through higher employment and purchasing activity,” stated Gabriella Dickens, economist at IHS Markit.