Turkey manufacturing activity remains in negative territory

Turkey’s manufacturing activity edged up in November, but remained in negative territory, indicating that recovery from an economic recession may be slow.

Turkey’s purchasing managers’ index, a key indicator of industrial sentiment, rose to 49.5 in November from 49 the previous month. the Istanbul Chamber of Industry (ISO) and IHS Markit, a London–based global information provider, said in a report published on Monday. Any reading below 50 indicates a deterioration in the industry.

New orders moderated at a slower pace and the rate of input cost inflation slowed to the weakest since January 2015, ISO and IHS Markit said. Manufacturers lowered their selling prices for the third month running.

Turkey’s government has introduced tax cuts and cheap loans for industrialists and consumers as it sought to bring Turkey out of an economic downturn, sparked by a currency crisis last year.

The economy grew by an annual 0.9 percent in the third quarter, the first increase this year, the Turkish Statistical Institute said on Monday. Quarter-on-quarter economic growth was 0.4 percent, less than half the 1 percent expansion in the previous three months.

Production increased slightly in November, the first rise since April 2018, according to ISO and IHS Markit. Panellists generally attributed any growth to improving market conditions, they said.

Companies scaled back their workforces following increases in employment in the previous two months. Purchasing activity stabilised, ending 19 months of moderation, according to the report.

Turkey PMI
Turkey manufacturing PMI (Source: Trading Economics)