Turkey’s manufacturing sector has deteriorated for the first time in a year, according to the HSBC Purchasing Managers Index (PMI™). The headline figure dropped to 49.8 in July, down from 51.2 in June as a drop in new orders and stagnating output took its toll.
It seems like the recent volatility in the global and the local financial markets may have impacted business sentiment negatively in the manufacturing industry
Chief Economist for Central and Eastern Europe and sub-Saharan Africa, HSBC
Manufacturing companies reported that the fall in new orders was linked to slowing market conditions. New export orders fell, at the fastest rate for nearly two years with protests and disruptions across Turkey and the fragile political conditions in Egypt given as reasons for the decline. The rate of input cost inflation accelerated to the quickest since November 2011. More positively, employment levels continued to rise in July.
Murat Ulgen, Chief Economist for Central and Eastern Europe and sub-Saharan Africa, HSBC, said: “It seems like the recent volatility in the global and the local financial markets may have impacted business sentiment negatively in the manufacturing industry. As such, the recent survey and hard data argue for downside risks to growth for this year. Nonetheless, continuous improvement in employment conditions supports Turkey’s longer-term favourable outlook.”
Last month, HSBC Global Research revised its full-year growth forecast for Turkey from 3.8 per cent to 3.3 per cent on the back of recent political unrest. HSBC maintained its 4.3 per cent growth forecast for 2014.
The HSBC Turkey Manufacturing PMI™ is based on data from purchasing executives in more than 400 manufacturing companies. A reading above 50 suggests expansion, while below 50 suggests decline.
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