ISTANBUL: Turkish manufacturing activity contracted in July for the 16th month in a row even as firms were supported by signs of easing inflation, with both inputs costs and output prices rising at slower rates, a business survey showed on Thursday.
The Purchasing Managers' Index (PMI) for manufacturing fell to 46.7 in July from 47.9 in June, dipping further below the 50-point line that separates expansion from contraction, a panel from the Istanbul Chamber of Industry and IHS Markit said.
Data in July showed that total new orders continued to soften amid challenging market conditions, the panel said, adding that the relatively positive picture around exports encouraged some manufacturer to raise output.
The pace of moderation in production softened to the weakest since March, it said, adding that inflationary pressures showed signs of waning in July and that the rate of increase of output prices softened to a five-month low.
"There were mixed signals for Turkish manufacturers... On the one hand, demand conditions remained challenging in July, with total new orders moderating," said Andrew Harker, Associate Director, IHS Markit.
"On the other, stable exports to back up the rise in June helped lead to a softer scaling back of production. Waning inflationary pressures signalled by the PMI in recent months provided scope for the Central Bank of Turkey's July interest rate cut." - Detailed PMI data are only available under licence from IHS Markit and customers need to apply for a licence.
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