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PMI: Turkish Factory Activity Contracts Slightly in December

PMI: Turkish Factory Activity Contracts Slightly in December

Thursday, 2 January, 2020 - 08:15
Workers are seen in front of a product line in a textile factory in Diyarbakir March 21, 2017. REUTERS/Umit Bektas

Turkish manufacturing activity contracted slightly for a third straight month in December, although output rose for a second month and factories expanded their purchasing in response, a business survey showed on Thursday.

After a currency crisis last year factory activity shrank for 17 consecutive months before holding steady in September. In October it returned to contraction, however, Reuters reported.

The Purchasing Managers' Index (PMI) for manufacturers stayed at 49.5 in December, just below the 50-point line that separates expansion from contraction, the Istanbul Chamber of Industry and IHS Markit panel said.

New export orders continued to ease, albeit at the softest pace in five months, the panel said, while a second consecutive moderation in employment suggested manufacturers had sufficient workforce for their current workloads.

The increase in cost burdens led firms to raise their selling prices modestly, ending three months of declining charges, it said, adding that the rise in input costs was mainly attributed to currency weakness.

"The Turkish manufacturing sector remained on the road to recovery at the end of 2019, according to the latest PMI data. Recent increases seen in official industrial production data therefore look set to continue," said Andrew Harker, associate director at IHS Markit, according to Reuters.

"While still facing challenging business conditions and a soft international demand environment, manufacturers will be more confident looking ahead to 2020 than when they were ahead of the move into 2019 this time last year."

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