The headline Purchasing Managers’ Index (PMI) eased from 46.4 in October to 45.7 in November, according to a survey conducted jointly by the Istanbul Chamber of Industry (ISO) and S&P Global.
Any figure greater than 50 indicates overall improvement in the sector. The index remained below the no-change mark for the ninth month running.
The latest data signaled an ongoing moderation of business conditions in the Turkish manufacturing sector in November amid global demand weakness, the report said.
Meanwhile, the rate of input cost inflation softened to a three-year low and suppliers’ delivery times improved at a near-record pace as a lack of demand for inputs eased price and supply pressures, it added.
Demand weakness was a key feature of the latest PMI survey, both from domestic and export markets, the report added.
“As a result, total new orders and new business from abroad slowed to the greatest extent in two and a half years. With regards to new export orders, the U.S.and Europe were highlighted as sources of demand weakness.”
A lack of demand in key export markets reportedly contributed to a further moderation in manufacturing production midway through the final quarter of the year. Output softened for the 12th month running.
“A sharp easing of input cost inflation was registered in November, with the latest rise in input prices the softest in three years,” the survey said, noting that higher raw material prices and currency weakness were behind the increase in costs but a lack of demand for inputs led the rate of inflation to moderate.
Weak demand for inputs also contributed to a marked improvement in supplier performance. “In fact, the shortening of lead times was one of the most pronounced on record, surpassed only by that seen in July 2005.”
In line with the trend in input costs, the pace of output price inflation also softened in November.
The report also said that employment returned to growth following two months in which staffing levels were scaled back, but the pace of job creation was only fractional.
“Weakness in global manufacturing demand caused difficulties for Turkish manufacturers in November, with new orders and output slowing accordingly,” commented Andrew
Harker, economics director at S&P Global Market Intelligence.
A recent drop off in demand for inputs, meanwhile, has acted to alleviate some of the headwinds that firms had been facing, he said.
The Turkish economy grew by 3.9 percent in the third quarter of 2022 from the same period a year ago, after expanding 7.5 percent in the first and 7.7 percent in the second quarter.