Turkey's manufacturing, which represents around a third of the country's economy, slipped back toward contraction in November as business conditions deteriorated, after nearly stabilising a month earlier, a survey showed on Thursday. The manufacturing Purchasing Managers' Index (PMI) slipped to 48.8 in November from 49.8 in October, according to the Istanbul Chamber of Industry and IHS Markit, slightly below the 50 mark that separates a contraction in activity from an expansion.
"The Turkish PMI remained below 50.0 in November, mainly reflecting the output and new orders components," Markit senior economist Trevor Balchin said. "More positively, employment and exports grew further during the month, with the latter boosted by the weaker currency. The flip-side of the depreciating lira was an intensification of cost pressures, with input price inflation accelerating after a relatively moderate outlook in the third quarter."
The depreciation of the lira exerted upward pressure on manufacturing input prices in November, with inflation accelerating for the second month running, Markit said. As a result, output prices rose at a higher rate compared with the previous period. Like other emerging market currencies, the Turkish lira has been battered by the dollar following Donald Trump's victory in the US presidential election. But it has also been plagued by domestic concerns, particularly security worries after a failed coup. It fell some 10 percent in November, its worst monthly showing since October 2008, during the global financial crisis. Detailed PMI data are only available under licence from Markit and customers need to apply to Markit for a licence.
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