Report shows pandemic dealt blow to business conditions for Turkish manufacturers at end of first quarter
Turkey’s Purchasing Managers’ Index (PMI) was at 48.1 this March, down from 52.4 in February, posting below the 50 no-change mark for the first time in three months, with the COVID-19 outbreak named as the main culprit.
According to the Istanbul Chamber of Industry PMI Manufacturing Index report, prepared in cooperation with London-based global data firm IHS Markit, output and new orders both softened, while firms scaled back purchasing activity.
“On a positive note, employment continued to increase,” the report said.
Difficulties in the sector were overwhelmingly attributed to the coronavirus outbreak, which resulted in moderations of both output and new orders, it said.
“Production softened for the first time in five months, while the easing in new business ended a two-month sequence of expansion,” it added.
The report indicated that new export orders also softened to a large extent, and more than the drop seen in total new business.
“Despite slower workloads, manufacturers in Turkey continued to take on additional staff during March,” it said, adding that employment rose for the third month running, in some cases due to improving new order inflows in previous months.
It also noted that stocks of purchases also fell, as did stocks of finished goods, as firms noted a general reluctance to hold inventories given current uncertainty.
The delivery of purchased items was also impacted by the virus, with suppliers’ delivery times lengthening to the second-largest extent since the survey began in June 2005.
It also stated that the rate of input cost inflation remained marked during March, with currency weakness the main factor behind the latest increase in input prices.
The report said that some supply shortages were also behind the rise in cost burdens.
“As a result of a marked increase in input costs, manufacturers raised their output prices,” it stressed, adding that the rate of charge inflation was sharp and the steepest in just under a year-and-a-half.