Manufacturing PMI Offers Hope: "Deterioration in Activity Conditions at Lowest Level Since May"

The Istanbul Chamber of Industry (ICI) has released the results of the Turkey Manufacturing PMI (Purchasing Managers' Index) survey for November 2024. The headline PMI data, considered a precursor to improvement in the sector, was measured at 48.3 in November, indicating the lowest level of deterioration in business conditions since May.

This increase was attributed to limited signs of recovery in demand. Although firms continued to face challenges in acquiring new orders, the slowdown in total new orders and new export orders was more moderate compared to October. The contraction in production also significantly slowed down, recording the lowest rate since April.

Manufacturing sector employment on the rise again Employment in the manufacturing sector increased after nine months of contraction, marking the most positive development in the November survey. While the increase in the number of employees was limited, it was recorded at the highest rate since July 2023.

The reduction in inflationary pressures provided some support to the sector. Input cost inflation decreased for the fourth consecutive month, reaching its lowest level in two years. Firms reporting an increase in input prices attributed this situation to rising raw material costs and the depreciation of the Turkish lira.

All sectors except the food sector slowed According to the Istanbul Chamber of Industry's Turkey Sectoral PMI report for November, new orders slowed in nine of the ten monitored sectors. The food products sector, on the other hand, showed a strong increase in new business volume, recording the fastest improvement since March.

In other sectors, although new orders slowed, the declines compared to the previous month generally eased. The textile sector was particularly noted as the only sector where the slowdown became more pronounced. Meanwhile, the chemical, plastic, and rubber products sector saw an increase in new orders from abroad after seven months.

Relief from inflationary pressures supported firms In November, the easing of cost pressures provided relief to manufacturers. Input price inflation decreased across all sectors, with the slowest increase occurring in chemical, plastic, and rubber products. Conversely, the non-metallic mineral products sector recorded the lowest inflation.

The number of sectors increasing employee counts rose to three from two compared to October. The land and maritime transport sector experienced the fastest expansion in employment, partially compensating for the record drop experienced in the previous month. Notably, the food products sector was highlighted as the sector with the fastest increase in final product prices.