PMI falls to 48.1 due to COVID-19 outbreak

The latest PMI® survey data from Istanbul Chamber of Industry and IHS Markit highlighted the impact of the coronavirus disease 2019 (COVID-19) pandemic on business conditions for Turkish manufacturers at the end of the first quarter. Output and new orders both softened, while firms scaled back purchasing activity. On a positive note, employment continued to increase

The latest PMI® survey data from Istanbul Chamber of Industry and IHS Markit highlighted the impact of the coronavirus disease 2019 (COVID-19) pandemic on business conditions for Turkish manufacturers at the end of the first quarter. Output and new orders both softened, while firms scaled back purchasing activity. On a positive note, employment continued to increase 

The headline Istanbul Chamber of Industry Turkey Manufacturing PMI is a composite single-figure indicator of manufacturing performance. It is derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases. Any figure greater than 50.0 indicates overall improvement of the sector. The headline PMI was at 48.1 in March, down from 52.4 in February and posting below the 50.0 no change mark for the first time in three months

Difficulties in the sector were overwhelmingly attributed to COVID-19, which resulted in moderations of both output and new orders. Production softened for the first time in five months, while the easing in new business ended a two-month sequence of expansion. Reflecting the global nature of the pandemic, new export orders also softened to a large extent, and one that was greater than that seen for total new business.

Despite slower workloads, manufacturers in Turkey continued to take on additional staff during March. Employment rose for the third month running, in some cases due to improving new order inflows in previous months. Firms did scale back their purchasing activity, however, for the first time since last October.

Istanbul Chamber of Industry Turkey PMI® Manufacturing Index

 

Stocks of purchases were also reduced, as were stocks of finished goods as firms noted a general reluctance to hold inventories given current uncertainty. The delivery of purchased items was also impacted heavily by the COVID-19 pandemic, with suppliers’ delivery times lengthening to the second-largest extent since the survey began in June 2005. Meanwhile, the rate of input cost inflation remained marked during March, with currency weakness the main factor behind the latest increase in input prices. 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. In fact, the rate of charge inflation was sharp and the steepest in just under a year-and-a-half.

Comment Commenting on the Istanbul Chamber of Industry Turkey Manufacturing PMI survey data, Andrew Harker, Economics Director at IHS Markit, said:

Output Index

After having increased in each of the previous four months, Turkish manufacturing output softened in March. According to respondents, the COVID-19 pandemic was the principal cause of the slowdown. The moderation was marked and the sharpest since last May.

Employment Index

March data pointed to a third consecutive monthly increase in employment, in spite of marked slowdowns in output and new orders. Those respondents that took on extra staff linked this to higher new orders in previous months and associated increases in output requirements. The rate of job creation was modest and softer than that seen in February

Istanbul Chamber of Industry Driving strength from her members’ contributions to Turkish economy and since her foundation in 1952, Istanbul Chamber of Industry (ICI) stands out as Turkey’s largest chamber of industry and one of the most powerful representatives of Turkish industry. The added value generated by ICI members represents more than 40% of the total added value propagated by Turkish industry. ICI members actualize approximately 35% of production of Turkish industry. 36% of Turkey’s Top 500 Industrial Enterprises consists of ICI members. ICI promotes the sustainable development of Turkish industry and contributes the improvement of her competitiveness via offering innovative services to her members. For this purpose, she develops new projects and services to the use of industrialists in crucial fields such as; innovation, technology development, university-industry cooperation, vocational training, international relations, environment and energy with local and international partnerships. Generating and conducting economic researches together with gathering data, ICI holds the widest knowledge on Istanbul industry whilst giving direction to Turkish industrialists and providing intense contribution for shaping economic and industrial policies. About IHS Markit: IHS Markit (NYSE: INFO) is a world leader in critical information, analytics and solutions for the major industries and markets that drive economies worldwide. The company delivers next-generation information, analytics and solutions to customers in business, finance and government, improving their operational efficiency and providing deep insights that lead to well-informed, confident decisions. IHS Markit has more than 50,000 business and government customers, including 80 percent of the Fortune Global 500 and the world’s leading financial institutions. IHS Markit is a registered trademark of IHS Markit Ltd. and/or its affiliates. All other company and product names may be trademarks of their respective owners © 2020 IHS Markit Ltd. All rights reserved. About PMI: Purchasing Managers’ IndexTM (PMI®) surveys are now available for over 40 countries and also for key regions including the eurozone. They are the most closely-watched business surveys in the world, favoured by central banks, financial markets and business decision makers for their ability to provide up-to-date, accurate and often unique monthly indicators of economic trends.Istanbul Chamber of Industry

Driving strength from her members’ contributions to Turkish economy and since her foundation in 1952, Istanbul Chamber of Industry (ICI) stands out as Turkey’s largest chamber of industry and one of the most powerful representatives of Turkish industry. The added value generated by ICI members represents more than 40% of the total added value propagated by Turkish industry. ICI members actualize approximately 35% of production of Turkish industry. 36% of Turkey’s Top 500 Industrial Enterprises consists of ICI members. ICI promotes the sustainable development of Turkish industry and contributes the improvement of her competitiveness via offering innovative services to her members. For this purpose, she develops new projects and services to the use of industrialists in crucial fields such as; innovation, technology development, university-industry cooperation, vocational training, international relations, environment and energy with local and international partnerships. Generating and conducting economic researches together with gathering data, ICI holds the widest knowledge on Istanbul industry whilst giving direction to Turkish industrialists and providing intense contribution for shaping economic and industrial policies. 

 

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