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01 Aug 2013

Turkish decline as orders fall

Turkish decline as orders fall

Manufacturing companies in Turkey reported that the fall in new orders was linked to slowing market conditions

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

Murat Ulgen,
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.

The intellectual property rights to the HSBC Turkey Manufacturing PMI™ provided herein is owned by Markit Economics Limited. Any unauthorised use, including but not limited to copying, distributing, transmitting or otherwise of any data appearing is not permitted without Markit’s prior consent. Markit shall not have any liability, duty or obligation for or relating to the content or information (“data”) contained herein, any errors, inaccuracies, omissions or delays in the data, or for any actions taken in reliance thereon. In no event shall Markit be liable for any special, incidental, or consequential damages, arising out of the use of the data. Purchasing Managers' Index™ and PMI™ are trade marks of Markit Economics Limited, HSBC use the above marks under license. Markit and the Markit logo are registered trade marks of Markit Group Limited.

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