Turkish factory activity grew in November, with new export orders and output rising, a closely-watched survey showed on Wednesday. Yet, a sharp increase in costs pushed output price rises to their fastest pace on record.
The Purchasing Managers’ Index (PMI) for manufacturing rose to 52 in November from 51.2 a month earlier, data from the Istanbul Chamber of Industry (ISO) and IHS Markit showed, staying above the 50 mark that denotes growth.
New export orders continued to grow, although price rises and shortages of electronics components and issues in the automotive sector meant total new business slowed for the second month in a row, the panel said.
Output increased marginally after a slowdown in the previous month. Production nevertheless supported a further rise in employment during the month.
The latest depreciation in the lira pushed input costs up further and in turn, firms raised selling prices at the steepest pace in the 16 1/2-year history of the survey, the panel said.
Ongoing challenges in sourcing raw materials and transportation issues caused longer delivery periods, but firms expanded input and stocks purchases to shield against disruptions.
“While the Turkish manufacturing sector overall remained in growth territory in November, firms are coming under increasing pressure from sharply rising costs as currency weakness exacerbates already high raw material prices,” said Andrew Harker, economics director at IHS Markit.
“In turn, factory gate prices were raised at the fastest pace on record, contributing to a dimming of new orders,” Harker said.
“If firms are to gain some respite from these pressures in the coming months, they will need to see some stabilization in the lira.”