The coronavirus (COVID-19) crisis has derailed the growth momentum that Turkey’s manufacturing companies had built up over three months, pushing their sector back into contraction, according to a March purchasing managers’ index (PMI) released by the
“The COVID-19 pandemic comes at a time when the Turkish manufacturing sector was building good growth momentum, and is therefore a bitter blow for firms,”
“Output and new orders slowed sharply, with the global nature of the outbreak hitting exports and supply chains hard. One positive, however, was that employment continued to rise, potentially reflecting hopes among firms that the disruption will prove short-lived,” Harker added.
The headline PMI was at 48.1 in March, down from 52.4 in February and marking the sharpest decline since May last year. Any figure on manufacturing performance below the 50.0 no-change mark denotes a contraction.
Difficulties in the sector were overwhelmingly attributed to COVID-19, which resulted in the moderations of both output and new orders,
Reflecting the worldwide nature of the pandemic, new export orders also softened to a large extent, and to an extent greater than that seen for total new business, the
“General reluctance to hold inventories”
“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.”
Also of note, the rate of input cost inflation in Turkish manufacturing “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,”
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