ISTANBUL: Turkish manufacturing activity grew at the fastest pace in seven months in October and business conditions improved for the third month in a row, a survey showed on Monday, as domestic demand picks up.
The HSBC Turkey purchasing managers' index for manufacturing, which accounts for about a quarter of the country's gross domestic product, rose to 51.5 in October from 50.4 in September.
Output and new orders increased faster than in September but new export business levels were unchanged.
Purchasing and employment continued to rise, although backlogs of work fell and finished goods stocks rose, posing downside risks to output.
"Total new orders rose but new export orders were unchanged following a decline in September. Some firms attributed the weakness in export orders to geopolitical instability," said HSBC economist Melis Metiner.
Input price inflation slowed from September and remained historically subdued despite a weaker lira.
New orders rose at the fastest rate since March. Rising volumes of new business led to a further increase in manufacturing production in October. "Since the end of June, Brent oil prices have fallen by 24 percent in USD terms and 20 percent in Turkish lira terms. This is likely to push down both input and output price inflation further in the coming months.
It is also good news for Turkey's current account deficit," Metiner said. - Detailed PMI data are only available under licence from Markit and customers need to apply to Markit for a licence.
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