“Sobering” PMI score for Turkish manufacturing in April

“Sobering” PMI score for Turkish manufacturing in April
/ bne.
By bne IntelIiNews May 4, 2020

The headline purchasing managers’ index (PMI) score for Turkish manufacturing in April marks the sector’s steepest slowdown since the global financial crisis.

Commenting on the survey data released on April 4, Andrew Harker, economics director at IHS Markit, said: “The April PMI data provide a sobering insight into the dreadful impact the COVID-19 [coronavirus] pandemic and associated lockdown measures had on the Turkish manufacturing sector during the month, with moderations in output and new orders worse even than those seen at the height of the global financial crisis. Firms were unable to maintain hiring in the face of sharply falling workloads, and can only hope that conditions begin to ease in the coming months.”

The PMI was posted at 33.4 for April, down from 48.1 in March (figures below the 50.0 threshold are in contraction territory), with company shutdowns widely reported.

“In both cases, the moderations were the greatest seen since the survey began in June 2005. As well as an easing of total new business, firms recorded a steep slowdown in new export orders as the global nature of the pandemic impacted markets around the world,” IHS Markit, which runs the survey with the Istanbul Chamber of Commerce, said.

Lira weakness

Turkish lira (TRY) weakness led to upwards pressure on prices, but rates of inflation eased from those seen in March, it added.

A lack of new work caused Turkey’s manufacturing firms to scale back their staffing levels for the first time in four months and data also highlighted the substantial impact the COVID-19 pandemic has had on supply chains, IHS Markit said, adding: “Lead times on the delivery of inputs lengthened to the greatest extent in the survey’s history, with respondents noting the closure of some suppliers, difficulties in sourcing materials and issues with logistics.

“Input costs continued to rise markedly during April, albeit at the slowest pace in three months. Currency weakness was often mentioned as the main factor leading input prices to increase. Manufacturers responded to higher input costs by increasing their output prices.

“That said, the offers of discounts at some firms to try and secure orders meant that the rate of inflation slowed to the weakest since January.”

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