Although the index showed that the slowdown in business conditions was moderate, this slowdown was more pronounced compared to September. New orders posted the sharpest slowdown in nearly a year, while employment started to decline again. Inflationary pressures, on the other hand, eased.
According to the Istanbul Chamber of Commerce Türkiye Sectoral PMI report for October, production increased in only two of the 10 sectors monitored, while employment declined in most sectors. On the other hand, inflation in input costs and final product prices continued its recent trend and lost momentum in most sectors.
50.0 remained below the threshold value
The results of the Istanbul Chamber of Commerce (ISO) Türkiye Manufacturing PMI (Purchasing Managers' Index) survey for the October 2023 period, which is considered the fastest and most reliable reference in manufacturing industry performance, which is the leading indicator of economic growth, were announced. According to the results of the survey, where all figures measured above the threshold value of 50.0 indicate an improvement in the sector, the headline PMI, which was 49.6 in September, decreased to 48.4 in October 2023 and remained below the threshold value of 50.0 for the fourth consecutive month.
Manufacturers reported that domestic and external demand was generally weak in October. As a result, total new orders and new export orders lost momentum. The slowdown in total new orders was recorded at the highest rate since November last year. In line with this outlook in new orders, production also continued to decrease in October. Thus, production lost momentum for four consecutive months.
Firms had difficulty in securing orders
Commenting on the Istanbul Chamber of Commerce Türkiye Manufacturing PMI survey data, S&P Global Market Intelligence Economics Director Andrew Harker said: "Demand conditions were the main factor slowing the Turkish manufacturing sector in October, with firms struggling to secure the volume of new orders to support production and maintain employment levels. On the other hand, inflationary pressures continued to ease, which may provide some optimism that a more favourable demand environment may emerge in the near term."
According to the report, production increased in only two of the 10 sectors monitored, while employment decreased in most sectors.
The machinery and metal sector with the highest increase in production
In the textile sector, where the most significant slowdown was recorded, the decrease reached the highest rate of the last 12 months. The slightest deceleration in new orders was recorded in food products.
The strongest performance in production was observed in food products with a limited increase compared to the previous month. Thus, the sector recorded growth for the last three months. The other sector that increased its production in October was machinery and metal products. The most significant slowdown was observed in textile companies.
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