June PMI shows Turkish manufacturing back on expansion path

June PMI shows Turkish manufacturing back on expansion path
By bne IntelIiNews July 1, 2020

The Turkish manufacturing sector got back on the path of expansion in June amid an easing of restrictions related to the coronavirus (COVID-19) pandemic, according to the latest manufacturing purchasing managers’ index (PMI) survey data from Istanbul Chamber of Industry and IHS Markit.

The headline PMI rose back above the 50.0 no-change mark for the first time since February during June, posting 53.9 up from 40.9 in May.

Andrew Harker, economics director at IHS Markit, said: “The recovery in the Turkish manufacturing sector gathered momentum in June, with a number of the variables from the survey back in expansion mode.

“The severity of the COVID-19 downturn was such, however, that much more will be needed in coming months to recover the output lost during the worst of the pandemic. We would hope therefore to see growth strengthen further in the months ahead.”

Marked increases in costs, prices

Output, new orders and employment were all higher in June, but further marked increases in both input costs and output prices were registered.

In further commentary on the latest PMI data on Turkish manufacturing, IHS Markit said: “A return to near-normality amid the lifting of COVID-19 restrictions enabled manufacturers to expand their production volumes at a marked pace during June, thereby ending a three-month period of moderation. New orders also returned to growth as customers reopened.

“The rise in new business from abroad was softer than that seen for total new orders, however, as some foreign clients remained closed. Higher output requirements led to expansions in both employment and purchasing activity over the month. Stocks of purchases fell, meanwhile, as inventories were used to help support increases in production.

Ongoing supply-chain disruption was evident, with delivery times lengthening to one of the greatest extents in the survey’s history. Transportation issues were widely mentioned by respondents. Currency weakness contributed to a further sharp monthly rise in input costs at Turkish manufacturers.”

The survey compiler also noted that Turkish inflation in June was softer than that seen in May, but remained above the series average. Higher input costs were often passed on to customers in the form of increased selling prices, it said, while output charges were up sharply, and at the fastest pace in three months.