Turkish manufacturing activity remains surpressed
Manufacturing activity in Turkey remained surpressed in June as domestic demand for goods stayed weak. according to the Istanbul Chamber of Industry Turkey PMI Manufacturing index
The index edged up to 46.8 from 46.4 in May. A reading below 50 indicates industrial slowdown.
Turkey’s economic activity appears to be slowing after posting 7.4 percent expansion in the first quarter and growth of 7.3 percent in the final three months of 2017. The central bank has raised interest rates by a total of 500 basis points this year to 17.75 percent, the highest rate in major emerging markets after Argentina, to stem a slide in the value of the lira.
“Reductions in new orders from both domestic and foreign sources formed the basis for the results in June,” the chamber said in the report. “Developments in demand were partially responsible for the decline, according to respondents. However, the slowdown in total order books softened from the previous survey period.”
Inflationary pressures remained elevated, according to the report. Inflation in Turkey accelerated to 12.2 percent in May. Figures for June are due to be published by the State Statistical Institute on Tuesday.
“On the price front, sharp increases in input costs were experienced across the Turkish manufacturing sector as developments in exchange rates fed into overall cost burdens,” the chamber said. “Average selling prices rose as a result. Moreover, the rate of output price inflation remained marked, despite easing slightly from May.
“Evidence suggested businesses were partially absorbing rising costs, as output prices increased to a lesser extent than input.”