Turkish manufacturing in record slump before election

Turkish manufacturing conditions deteriorated to the worst since at least 2012, a month before presidential and parliamentary elections.

IHS Markit’s PMI index of manufacturing fell to 46.4 in May from 48.9 in April, in a second month of declines. Any reading above 50 indicates an improvement of the sector.

“Inflationary pressures remained marked in May,” IHS Markit said in the survey published on Friday. “Cost burdens continued to rise in the manufacturing sector. Panellists largely blamed unfavourable exchange rates.”

The lira fell to a record low against the dollar last month, forcing the central bank to raise interest rates 300 basis points to 16.5 percent in an emergency meeting. President Recep Tayyip Erdogan has called early presidential and parliamentary elections for June 24, citing economic factors and the war in neighbouring Syria.

Rising prices of both manufacturers and suppliers indicate continued pressure on inflation in Turkey, which stood at 10.9 percent in April, more than three times the emerging-market average. Data for May is due to be published on June 4.

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Turkey manufacturing