Manufacturing PMI Traversed Below Threshold in Last 10 Months

Istanbul Chamber of Industry announced the manufacturing purchasing managers index (PMI) for February.

Istanbul Chamber of Industry Manufacturing PMI decreased to 49.4 in March and was below the threshold value of 50.0 for the first time in the last 10 months. Pressures on customers and price increases after Russia's occupation of Ukraine deterred buyers and led to negativities in production. The occupation of Ukraine also caused the increase in export demand to lose momentum. Employment growth also slowed, and the lowest rates of the 22-month expansion period were expressed. Istanbul Chamber of Industry noted in its March analysis that difficult operating conditions continue in some manufacturing industry sectors and the war in Ukraine increased the existing difficulties. While the net slowdown in the production sector was experienced in non-metallic mineral products, the two sectors that increased their production were expressed as clothing and leather products, and land and sea vehicles. Production and new orders slowed in most industries, while supply chain disruptions and inflationary pressures remained high overall. The depreciation of the Turkish lira and the war in Ukraine led to record levels in raw material prices. Input costs inflation fell to the lowest level in the last five months, but remained high. Some companies participating in the survey underlined the rise in oil prices. The increase in costs has reduced the activities of companies that will generate new orders to a record level since 2020. The lack of pressure on capacity has allowed manufacturers to reduce their backlog at the highest rate in nearly a year.