Turkish factory activity contracted again in May as a slowdown in demand caused firms to scale back production and employment, a survey showed on Monday. The Purchasing Managers’ Index (PMI) for Turkish manufacturing fell to 48.4 from 49.3 in April, according to a survey by the Istanbul Chamber of Industry and S&P Global, dropping further below the 50-point level that marks growth in activity.
Challenging Demand Conditions
Firms reported a drop in new orders, including export orders, due to challenging demand conditions and high prices, the survey showed. The slowdown led manufacturers to scale back production and reduce staffing levels, the survey said, with some firms reluctant to replace departing staff due to lower workloads.
Inflationary pressures continued to wane last month, as both input and output prices continued to increase but at a slower pace, the survey showed.
Andrew Harker, economics director at S&P Global Market Intelligence, commented, “Latest data suggest that Turkish manufacturers are facing an increasingly challenging operating environment, with new work seemingly harder to come by.”
“One light on the horizon comes in the form of softening inflationary pressures, however. Given the still detrimental impact high prices is having on demand, an easing of these pressures will hopefully help lead to a recovery in the sector over the second half of the year.”
