The sharp decline in the manufacturing PMI continues
The results of the Istanbul Chamber of Industry (ISO) Turkish Manufacturing PMI (Purchasing Managers’ Index) survey, the leading indicator of economic growth, for the period of November 2022 have been announced.
According to the survey results, in which all measured numbers above the 50 threshold point to an improvement in the sector, the headline PMI, which was at 46.4 in October, dipped to 45.7 in November.
Thus, the manufacturing PMI remained below the threshold value of 50 for the ninth consecutive month. The deterioration in operating conditions was the most significant since the first wave of Covid-19 in early 2020.
INTERNAL AND EXTERNAL DEMAND WEAKENS
The most surprising development in the latest PMI survey was weak demand in both domestic and foreign markets.
Consequently, total new orders and new export orders showed the most significant loss of momentum in the last two and a half years. The US and Europe stood out as the main source of the demand decline in new export orders.
Companies reported that the slowdown in manufacturing output was due to a lack of demand in major export markets. The trend of slowing production also reached the 12th month.
Input cost inflation slowed significantly in November, with input price growth at the slowest rate in three years. While rising commodity prices and the depreciation of the lira were effective in raising costs, low demand for inputs had a restraining effect on inflation.
LIMITED INCREASE IN EMPLOYMENT
Weak demand for inputs also led to a marked improvement in supplier performance. In fact, the decline in delivery times was the most significant in the survey’s history, excluding July 2005.
In line with the downward trend in input costs, final product price inflation also slowed down. While the rise in commodity prices was strong in November, it was at its lowest level since August.
Finally, employment rose again in November after two months of decline. On the other hand, said increase was very limited.
SECOND HARDEST DECREASE IN DELIVERY TIMES TO SUPPLIERS
Commenting on Turkish manufacturing PMI survey data from the Istanbul Chamber of Industry, S&P global market intelligence economics director Andrew Harker said production and new orders slowed in November due to difficulties caused by weak demand from Turkish manufacturers in the global manufacturing industry.
Drawing attention to the fact that input cost inflation fell to a three-year low, Harker said: “The second-hardest drop in survey history, dating to 2005, was experienced in the delivery times of the suppliers.”