Manufacturing PMI Signals Growth For The Last 7 Months

According to the data announced by the Istanbul Chamber of Industry, Manufacturing PMI reached 52.1 in December. PMI last showed a contraction in manufacturing in May. Levels above 50 in the Manufacturing PMI index are considered as growth signals and below are considered as contraction signals. The fastest increase was experienced in the non-metallic mineral products sector. For the first time since May 2020, new orders decreased across all sectors. New export orders grew in seven of the 10 sectors. Employment also continued to increase overall. One of the factors that contributed to the improvement in operating conditions in December was the continuation of employment growth. While employment increased at the fastest pace since August, respondents stated that this was mainly due to efforts to expand capacity. On the other hand, a more negative picture emerged in other indices of the survey due to the negative effects of strong inflationary pressures on activities. Input costs increased the most in the history of the survey, which began in mid-2005, and the inflation rate rose above the previous record level in September 2018. Firms stated that the main factor that increased their cost burden was the depreciation of the Turkish lira. In response, manufacturers increased their selling prices at a record pace. Total new orders slowed for the third month in a row as price increases deterred many customers. This was despite new export orders, which continued to rise due to the improvement in international demand. After the moderate increase in November, production slowed down in December. Price pressures were also among the factors that led to a slowdown in production. Firms slowed down their purchasing activities in order to contain costs and adapt to the deceleration in demand, while at the same time reducing their stocks of both inputs and finished products.