The wheels of the economy are slowing down

The wheels of the economy are slowing down

Signs of strong contraction in the industry in November

The manufacturing Purchasing Managers’ Index (PMI) fell to 47.2 in November, indicating that the contraction that had dragged on for five months had accelerated. The contraction recorded in November was the sharpest in a year.

The manufacturing PMI, compiled by S&P Global for the Istanbul Chamber of Industry (ISO), reached the value of 48.4 in October. For the fifth time in a row, the index received a value below 50, which separates growth from contraction, as the slowdown in production, new orders, purchases and employment continued.

DECREASE IN NEW ORDERS

The contraction of new orders accelerated in the last quarter of the year due to the deterioration of conditions in national and international markets. New orders recorded the sharpest contraction since November 2022.

Manufacturers claimed there was a slowdown in new export orders due to weak external demand conditions.

While the new orders subindex decreased from 45.3 to 44.3 in November, the new export orders index increased from 47.7 to 48.4, but remained below 50, indicating that the contraction He continued, although at a slower pace.

THE BIGGEST SLOWDOWN IN PRODUCTION IN THE LAST YEAR

While production recorded the biggest slowdown in a year due to weak demand, companies participating in the survey said that conflicts in the world and the difficulty in obtaining raw materials also influenced the slowdown.

The production subindex decreased from 48.2 to 46.9 in November.

A SIGNIFICANT DECREASE IN EMPLOYMENT

In addition to companies reducing their hiring in parallel with the decrease in production, the sharpest drop in employment since October 2022 occurred with layoffs and retirements. The employment subindex decreased from 49.4 to 49.1 in November.

Input price inflation fell in November to its lowest level in six months, but still remained high, as the depreciation of the TL was said to have increased raw material prices.

Input prices decreased from 60.9 to 60.5 in November.

‘WORRYING’

Assessing the PMI data, S&P Global Economics Director Andrew Harker said: “The latest Turkish manufacturing PMI data announced is worrying as it shows the sector’s slowdown is gaining momentum as we approach the end of the year”.

“Widespread weakness in demand, both at home and abroad, is making it increasingly difficult for companies to acquire new business and leading to reduced production, employment and purchasing,” Harker said. (REUTERS)

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Source: Sozcu

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