Türkiye's manufacturing activity rose to a three-month high in August, a survey showed Tuesday, signaling a modest improvement in business conditions even as the sector remained in contraction.
The Istanbul Chamber of Industry (ISO) Türkiye Manufacturing Purchasing Managers' Index (PMI), compiled by S&P Global, rose to 48.1 in August from 47.7 in July. A reading below 50 indicates contraction, while one above 50 signals growth.
Surveyed businesses said the war in the Middle East continued to weigh on the manufacturing sector midway through the third quarter, mainly through subdued demand and heightened market uncertainty.
Both total new orders and new export business declined in August, although the contractions were less pronounced than in July.
Manufacturers also cut production for a third consecutive month. The latest decline was modest and broadly in line with the pace recorded in July.
With workloads remaining subdued, manufacturers reduced employment and purchasing activity at solid rates, with both declines accelerating from the previous month.
Firms also drew down existing inventories to meet order requirements where possible, leading to further reductions in stocks of both purchases and finished goods.
Meanwhile, input cost inflation accelerated to a three-month high amid reports of higher fuel and oil costs as well as rising raw material prices. Manufacturers responded by raising their selling prices.
Output price inflation also accelerated, although it remained below its average for the first half of the year.
Supplier delivery times lengthened as disruptions linked to the Middle East conflict affected supply chains, the survey showed.
Andrew Harker, economics director at S&P Global Market Intelligence, said the war in the Middle East continues to cast a shadow over the manufacturing sector, limiting demand and adding a layer of uncertainty to business decisions.
"Despite this, firms have been able to limit the impact, with new orders easing to the smallest degree in three months during August," Harker said.
"This provides some hope that the sector can move up a gear in the months ahead, but much still depends on events in the Middle East and how they play out," he added.
