Turkey’s Purchasing Managers’ Index (PMI) for the manufacturing sector was 44.2 in December as announced based on a survey today by Istanbul Chamber of Industry/ IHS Markit.
Following a weak revival to 44.7 in November, the drop back to 44.2 in December signals that the manufacturing industry remains deeply engaged in a contraction phase.
Output and new orders continued to ease due to challenging business conditions, albeit at softer rates than in November, the report noted.
“New export orders continued to moderate at a much softer pace than total new business,” it added.
The decline in cost inflation pave the way for companies to reduce selling prices to boost customer demand, the report said.
The increasing rate of input prices slowed for the third successive month in December from September’s peak and was the weakest since September 2016. A moderation in output requirements led to a further scaling back of employment at the end of 2018, with purchasing activity also slowing again during December.
The meaning of the December PMI is that further contraction is in the cards for at least 1H19 with Turkey’s unemployment rate set to rise further up. The government’s extension of consumption tax cuts do not seem to be helping out the industry side while lira’s relative stability is easing the pain on producers making them able to at least melt down inventory build ups through price cuts.