Skip to content Skip to Search
Skip navigation

Slump in orders and exports cools Turkish PMI sentiment

A worker at a foundry in Istanbul. Turkey's manufacturers reported drops in both domestic and foreign orders in the May 2024 PMI Alamy via Reuters
A worker at a foundry in Istanbul. Turkey's manufacturers reported drops in both domestic and foreign orders
  • Turkey’s May PMI down 0.5 points
  • Lowest level this year
  • CPI change at 75.5%

Turkish manufacturers are finding their operational environment increasingly difficult, a new survey has revealed.

Tighter economic conditions led expectations to fall in May, although some relief came from the slight easing of inflationary pressures.

The monthly Purchasing Managers’ Index (PMI) survey, conducted by the Istanbul Chamber of Commerce and S&P Global, fell further into negative territory in May. 

The index fell from April’s 49.3 to 48.8, according to data released on June 3, taking the PMI to its lowest level this year. A score of higher than 50 points denotes expansion, so the fall indicates a continued cooling of expectations by Turkish manufacturers. 



There was a drop in new domestic orders in the period, along with a softening of export sales, the eleventh month of declines. There was also a decline in output and a scaling-back of new hirings across the month. 

The one bright spot in the PMI survey was inflation. The manufacturers surveyed expected a slowing in the rate of input and output price rises. 

The May inflation data, also issued on June 3 by Turkey’s statistics agency Turkstat, put the Consumer Price Index change at 75.5 percent year on year, the highest level since the end of 2022, with month-on-month prices rising by 3.4 percent. 

There was somewhat better news for manufacturers in the wholesale inflation data. Turkstat’s Producer Price Index rose by just below 2 percent in May, taking year-on-year increases to 57.7 percent. 

Turkey’s May CPI figure was just under twice the Central Bank’s 38 percent year-end target. However, while inflation is projected to ease in the second half of 2024, as a result of higher interest rates, demand may come under further pressure following new austerity policies that will restrict state spending and investment. 

Among the cost-cutting measures are a three-year ban on new vehicle purchases or rentals by state agencies, a halt to almost all building purchases or construction for a similar term and a freeze on new public service staff hirings.

Overall, the plan announced by finance minister Mehmet Şimşek on May 13 aims to reduce inflation and domestic demand. Government outlays are to be cut by 10 percent for goods and services and 15 percent for investments.

It is too soon to judge the broader impact of the austerity package on manufacturers, according to economist Arda Tunca, as full details have yet to be released. However, the automotive industry is likely to be affected if new purchases and rentals are halted. 

“The government said there would be more programmes to be declared under the austerity measures,” he told AGBI. “We have to wait and see what the second and third phases of the programmes bring.”

Latest articles

Shoppers choose vegetables in Istanbul; inflation means people are spending on essentials

Turkish retailers’ confidence wavers as inflation bites

Confidence is falling among Turkish retailers, according to a survey from the country’s statistics agency Turkstat. Shoppers have been scaling back on big-ticket purchases, spending instead on basic consumer goods as inflation piles pressure on household incomes. May’s business confidence report, released by Turkstat on June 24, showed sentiment in the retail sector at its […]

Water is handed out to pilgrims in Mecca. Hundreds of pilgrims without a Hajj permit died during extreme heat last week

Egypt shuts down 16 travel companies after Hajj tragedy

Egypt has withdrawn the operating licences of 16 travel companies for organising unlicensed Hajj trips to Saudi Arabia. A statement from the Egyptian government said the companies would be prosecuted and fined, with the funds used to compensate pilgrims’ families for their loss.  Hundreds of Egyptians were among 1,301 people who died of exposure to […]

A floating production unit in Israel's Karish gas field in the eastern Mediterranean. Carlyle is creating a new oil and gas company to manage the field

New Carlyle entity to manage East Med gas projects

Carlyle, the Nasdaq-listed private equity company, is creating a new oil and gas company to manage recently-acquired assets in the Mediterranean hydrocarbons market. The new as yet un-named entity will be led by former BP CEO Tony Hayward and will manage a portfolio of gas-weighted exploration and production assets in Italy, Egypt and Croatia, according […]

Spinneys plans to open another 12 stores in Saudi Arabia by 2028

Spinneys opens first Saudi supermarket in Riyadh

Spinneys has opened its first supermarket in Saudi Arabia and is planning a further 12 stores in the country by 2028. The UAE supermarket operator listed on the Dubai Financial Market last month and raised AED1.38 billion ($375.7 million) from its initial public offering, which was oversubscribed almost 64 times. The first Spinneys in Saudi […]