Turkey’s manufacturing sector recovery continued in December, albeit at a slightly gentler pace, a survey showed Monday, amid restrictions aimed at slowing the second wave of the coronavirus outbreak.
The headline Purchasing Managers’ Index (PMI) fell to 50.8 in December, its lowest level since May, from 51.4 a month earlier, data from the Istanbul Chamber of Industry (ISO) and IHS Markit showed, staying above the 50 mark that separates expansion from contraction.
The latest reading indicates that the manufacturing sector’s health has improved least in the last seven months despite the conditions of business continuing to show signs of improvement, the survey report said.
A surge in infections caused a slowdown in output and new orders in December, ISO and IHS Markit said, but firms continued to expand employment and increased purchasing activity.
"New export orders also eased amid a second wave of infections across a number of export markets," the report noted.
"Employment rose for the seventh successive month and at a solid pace that was unchanged from that seen in November," it said.
Manufacturers experienced difficulties securing raw materials, with suppliers’ delivery times lengthening, the report said, contributing to a sharp rise in input costs.
Currency weakness also played a role in the rise in input costs and output prices, the panel said.
"Output prices also rose sharply, albeit at a slightly slower pace than in November," it noted.
"The Turkish manufacturing sector ended 2020 facing twin headwinds," said Andrew Harker, economics director at IHS Markit.
"First, the COVID-19 pandemic, which has blighted so much of the year, led output and new orders to soften. Second, severe supply-chain disruption hampered the ability of firms to secure the materials they need and added to already sharply rising cost burdens," Harker noted.
Despite these challenges, he said, firms were keen to expand capacity, taking on extra staff and purchasing more inputs.
"This suggests that manufacturers will be ready as and when the aforementioned constraints on operations ease," Harker said.