Turkey’s Manufacturing Sector Contraction

ISTANBUL (Reuters) – Turkey’s manufacturing sector contracted sharply in January as output, new orders, and employment all fell, according to a business survey on Monday.

The Purchasing Managers’ Index (PMI) dropped to 48 in January from 49.1 in December, moving further below the 50.0 mark that indicates growth, based on a survey by the Istanbul Chamber of Industry and S&P Global.

Both new business and new export orders moderated, reflecting challenges in the sector amid weak demand and rising inflationary pressures.

Employment levels declined for the second consecutive month, though the decline was marginal.

Supply chain pressures eased slightly, with lead times rising at their slowest rate in at least four months.

Nevertheless, inflationary pressures intensified, with input prices accelerating due to currency weakness and the increasing costs of raw materials, fuel, and wages.

Output price inflation also reached a four-month high but remained below the series average.

“The sharper slowdown at the start of 2025 comes as something of a disappointment, and shows the ongoing fragility of customer demand,” stated Andrew Harker, Economics Director at S&P Global Market Intelligence.

“Firms will be hoping that conditions revive in the months ahead.”)