Turkish manufacturing growth momentum accelerates in March

Growth in Turkey’s manufacturing sector improved in March, partly reversing a slowdown the previous month, on the back of new orders, IHS Markit and the Istanbul Chamber of Industry (ISO) said in a monthly survey on Thursday.

Turkey’s manufacturing PMI, a key gauge of industry performance, rose to 52.6 in March from 51.7 the previous month. The index had stood at 54.4 in January.

PMI is a composite single-figure indicator of manufacturing performance. Any reading above 50 reflects an overall improvement of the sector.

“The Turkish manufacturing sector managed to secure renewed increases in new orders and expand both output and employment again in March, despite facing some substantial headwinds,” said Andrew Harker, economics director at IHS Markit.  

“The increasingly familiar problem of difficulties obtaining raw materials affected suppliers’ delivery times, inventories and input costs, while acting to restrict growth of production.”

Inflationary pressures mounted, however, exacerbated by currency weakness, Harker said. The Turkish lira dropped more than 10 percent against the dollar in the last 12 days of March after President Recep Tayyip Erdoğan sacked and replaced the governor of the central bank.

“Firms will be hoping that some of these headwinds start to ease in the months to come so that growth in the sector can start to build momentum,” Harker said.