Subdued demand conditions remained a feature of the Turkish manufacturing sector midway through the third quarter of the year, according to the Istanbul Chamber of Industry Türkiye Manufacturing Purchasing Managers’ Index (PMI) for August, released on September 2.

The headline PMI posted 47.8 in August (anything below the 50.0 threshold signifies contraction). That was up from 47.2 in July but still showed a moderation in the health of manufacturing during the month. Business conditions have softened continuously since April. Challenging market conditions led to a further weakening of new orders in August, the fourteenth in as many months, noted survey compiler S&P Global.

Andrew Harker, economics director at S&P Global Market Intelligence, said: "Turkish manufacturers again struggled to generate new order growth during August, despite some encouraging signs with regards to exports. The subdued overall demand picture led to further scaling back of production, employment and purchasing, with firms also showing a reluctance to hold inventories.

“Hopefully, the nascent recovery in exports seen in August will solidify in the months ahead and spread more widely to help the sector move into recovery mode."

Although new orders in August softened to a lesser extent than in July, the pace of moderation was still solid and stocks of inputs were reduced to the largest degree in just over a year, said S&P.

“Meanwhile, input costs continued to rise sharply and manufacturers increased their output prices at a faster pace than in the previous month,” it added, noting currency weakness was the main factor in inputs inflation.

The picture for international demand was more positive. New export orders returned to growth for the first time since June 2023.