Manufacturing PMI indicated contraction in the fourth month
The manufacturing Purchasing Managers’ Index (PMI) fell to 48.4 in October and remained below 50 for the fourth consecutive month, indicating that contraction in the sector continues.
The manufacturing PMI, compiled by S&P Global for the Istanbul Chamber of Industry (ISO), had a value of 49.6 in September. While October saw a milder slowdown in production and new orders, the pace of increases in input prices and output slowed markedly.
PMI values below 50 indicate contraction, while values above 50 indicate growth.
FURTHER SLOWDOWN IN NEW ORDERS
In October, manufacturers noted weak demand both at home and abroad, while total new orders and new export orders slowed. The biggest slowdown in total new orders was recorded since November.
While the new orders subindex decreased from 47.6 to 45.3 in October, the new export orders index increased from 47.3 to 47.7.
PRODUCTION HAS BEEN DECREASED FOR FOUR MONTHS
In parallel with new orders, the decline in production continued in October and decreased for the fourth consecutive month. The production subindex decreased from 49.5 to 48.2 in October.
As inflation-related pressures continued to ease early in the final quarter of the year, the rates of increase in input costs and output prices declined for the third consecutive month. The price increases were mainly due to the depreciation of the TL.
After September’s increase, the latest survey again pointed to a decline in employment. This marks the end of five consecutive months of job creation. The participants indicated resignations and retirements as reasons. Employment decreased from 50.1 to 49.4.
‘ORDER IS NOT ENOUGH TO MAINTAIN STAFF LEVEL’
Assessing the PMI data, S&P Global Economics Director Andrew Harker said: “Demand conditions were the main limiting factor for the Turkish manufacturing sector in October, with companies struggling to receive new orders in quantities. sufficient to support production and maintain staffing levels.
“On the other hand, seeing further easing on the inflation side may provide the basis for optimism that an improved demand environment will be achieved in the near future,” Harker said.