The contraction that began in Türkiye’s textile and ready-to-wear industries has now expanded into multiple sectors, triggering job losses and weakening demand for Turkish-made goods. Due to the current exchange rate policy, Turkish products remain expensive both domestically and internationally — resulting in declining new orders across nearly all industrial sectors except food.
Under the anti-inflation program, the high interest rate and low exchange rate policy implemented for nearly 2.5 years continues to slow down industrial activity. The latest Istanbul Chamber of Industry (ISO) Türkiye Manufacturing PMI and ISO Sectoral PMI reports indicate that the outlook is unlikely to improve soon, with production, employment, and new orders slipping deeper into negative territory.
The manufacturing sector, which managed to enter the final quarter of the year despite difficult conditions, saw its headline PMI fall to 46.5 in October — the lowest in the past three months. The report shows that October marked the 19th consecutive month of slowing production, driven primarily by weak demand and declining new orders. Both domestic and export-oriented orders continued to fall, making it increasingly difficult for factories to maintain staffing levels. According to the survey, companies refrained from replacing departing workers, extending the uninterrupted decline in employment to 11 months.
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PMI Lowest in Land and Sea Vehicles Sector
According to reporting by Ekonomim’s Merve Yiğitcan, the sectoral PMI data shows that only the food industry remained slightly above the critical 50 threshold, while the other nine sectors stayed in contraction.
• Land and sea vehicles recorded the lowest PMI at 42.7.
• They were followed by wood and paper products at 43.7, and machinery and metal products at 44.6.
Production slowed across all 10 sectors, with the steepest contraction seen in land and sea vehicles. Wood and paper products, along with apparel and leather, were also among the hardest-hit sectors.
New orders showed a slightly more positive outlook, with only one sector — food products — recording growth for the third consecutive month, albeit at a moderate pace. The sharpest decline occurred in the wood and paper sector. In basic metals, land and sea vehicles, and machinery and metal products, new orders also fell significantly.
Export orders in particular weakened most sharply in textiles, apparel, and leather products, with nine out of ten sectors showing contraction. Food products was the only sector where export orders remained stable.
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Highest Inflation in Food and Machinery
Purchasing activity fell in most sectors, except food products, where rising new orders drove an increase in input purchases. Weak input demand helped shorten supplier delivery times in half of the monitored sectors. The most notable improvement in supplier performance occurred in chemicals, plastics, and rubber.
Input costs rose sharply across all sectors in October.
• The fastest cost inflation was recorded in machinery and metal products.
• The lowest inflation occurred in apparel and leather.
Final product prices also increased across all industries for the first time in eight months, with textile producers raising prices as demand declines slowed. The highest output price inflation was recorded equally in the food and machinery and metal products sectors.
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Employment Shrinks in Most Sectors; Metal and Electronics See Small Gains
The downturn has made it increasingly difficult for manufacturers to maintain employment levels. Most Turkish industrial sectors entered the last quarter of the year with a tendency to cut jobs. Only the electrical-electronics sector and basic metal industries reported increases in staffing, while the sharpest decline occurred in the textile sector.
Official data confirms the trend. According to Turkish Statistical Institute (TÜİK) figures, industrial salaried employment dropped from 5.077 million in August 2024 to 4.892 million in August 2025, marking a loss of 184,000 workers over one year.
Source: Patronlar Dünyası/ Prepared by: İlayda Gök