Manufacturing Industry Indicator Points to Growth After 11 Months
Turkey’s manufacturing Purchasing Managers’ Index (PMI) rose above 50 in January, indicating no contraction in the manufacturing sector for the first time in 11 months in the first month of the year.
Production and new orders fell modestly in January, while employment rose for the third consecutive month. On the other hand, raising the minimum wage increased the cost pressures faced by businesses.
The manufacturing PMI, compiled by S&P Global for the Istanbul Chamber of Industry (ISO), rose to 50.1 in January after registering 48.1 in December. After the index was below 50 for 10 months, it rose above 50 for the first time in January, pointing to stable business conditions in the sector.
Values below 50 in PMI indicate contraction, and values above 50 indicate growth.
Production and new orders were down slightly compared to December, with signs of improving demand, as noted by some companies. It was the smallest decline in production in 14 months and the smallest decline in new orders during the contraction period that began in October 2021.
The production sub-index rose to 49.8 from 47.5 in January, indicating the contraction has almost stopped, while new orders rose to 49.4 from 46.8.
While employment decreased from 52.1 to 52, the new export orders sub-index increased from 45.6 to 47.6.
INCREASE IN PRICE OF INPUTS
Input price inflation posted the fastest rise in six months in January. One of the main factors that influenced the rise was the increase in the minimum wage, while the prices of raw materials and the weak evolution of the LT also played a role in the increase in costs.
Assessing the PMI data, Andrew Harker, S&P Director of Global Economics, said: “The latest PMI survey indicated that the manufacturing sector may soon return to growth. “While operating conditions were stable in January, signs of improved demand and upward movement in production and new orders give hope for growth in the coming months,” he said. (Reuters)