Turkish manufacturing remains in contraction despite slight February uptick
A worker engages in welding at a manufacturing facility in Türkiye. (AA Photo)
Türkiye’s Manufacturing Purchasing Managers’ Index (PMI) rose to 48.3 in February, yet remained below the 50-threshold, signaling a continued slowdown in operating conditions by mid-first quarter, the Istanbul Chamber of Industry (ISO) reported on Monday.
As a result, the sector has remained in contraction territory since April 2024.
Survey respondents reported weak demand conditions in February, leading to a continued loss of momentum in both production and new orders.
Although the slowdown in new orders, now in its 20th consecutive month, eased slightly compared to January, it was still pronounced. External demand conditions also weakened, with new export orders experiencing the sharpest deterioration since October 2024.
‘Manufacturing sector struggles to regain momentum’
Similar to new orders, production also slowed in February. The latest data marked the 11th month of decline, though the rate of contraction was moderate and less severe than the previous month.
The shortfall in new orders prompted manufacturers to reduce both employment and purchasing activity in February. The declines in both areas were more pronounced compared to January.
Inventories of inputs and finished goods also declined. Input cost inflation accelerated for the third consecutive month, with survey participants attributing the sharp rise to higher raw material and labor costs, as well as the depreciation of the Turkish lira.
In response to rising input costs, output prices also increased at a faster pace, pushing inflation to its highest level in five months. Supplier delivery times lengthened moderately in February, with firms citing price increases and geopolitical factors as key causes of delays.
Commenting on the data, Andrew Harker, Economics Director at S&P Global Market Intelligence, noted that the Turkish manufacturing sector continued to struggle to gain momentum in early 2025, with firms facing additional challenges in securing new orders.
“As a result, manufacturers have remained hesitant to expand employment or allocate resources for new material purchases,” Harker said.
“The faster rise in both input costs and output prices underscores the persistence of inflation-related challenges, which could make it more difficult for firms to secure new business in the near term.”
Türkiye’s manufacturing sector contracted by 0.4% in 2024, according to the Turkish Statistical Institute (TurkStat), while the country’s gross domestic product (GDP) grew by 3.2%, reaching an all-time high and aligning with the global average.
