Skip to content Skip to Search
Skip navigation

Turkish manufacturing faces stifling cost pressures

The number of people employed in Turkey’s construction sector hit 1.973 million between April and June Reuters
The number of people employed in Turkey’s construction sector hit 1.973 million between April and June
  • Turkish PMI for manufacturing was 51.5 in June, showing growth
  • Job creation rose to meet production demand and for reconstruction
  • Weak lira and cost pressures meant order growth was ‘only marginal’

Turkish manufacturing output grew by the end of the second quarter, but new order growth softened and price pressures mounted because of currency depreciation, the latest industry tracker showed. 

The headline Purchasing Managers’ Index (PMI) for manufacturing, from Istanbul Chamber of Industry and S&P Global, stood at 51.5 in June.

This was the same as the previous two months and remained above the 50-point line that separates expansion from contraction.

The PMI is derived from indicators such as new orders, output, employment levels, supplier delivery times and stocks of purchases. 

June’s figure signalled “a further modest improvement in the health of the manufacturing sector”, as business conditions have now improved in each of the past six months, the report noted.

In particular, output was up for the fourth consecutive month, with the rate of growth the fastest since July 2021. 

The rise in production was attributed to higher demand and the country’s ongoing recovery from the February earthquake. There was also an uptick in business activity following the election period, which ended with the surprise re-election of Recep Tayyip Erdoğan at the end of May.

New orders rose for the fourth month running, but the rate of increase was “only marginal and the softest in the current sequence of expansion”.

The report said this was partly a result of the depreciation of the Turkish lira against the US dollar, which is contributing to cost pressures overall.

Exchange rate fluctuations pushed up both input cost and output price inflation in June – the former rose at the fastest pace in almost a year, according to the index. Meanwhile, suppliers’ delivery times increased as vendors struggled to meet demand. 

Backlogs of work increased for the second time in the past three months, while job creation rose as firms took on more staff to help meet higher production requirements. 

Andrew Harker, economics director at S&P Global Market Intelligence, said Turkish manufacturing production “kicked on nicely in June, and the goods-producing sector as a whole finished the first half of the year in broadly positive shape as demand improved further”. 

However, he added, “the familiar foe of currency weakness” limited growth in new orders and halted the recent easing of inflationary pressures. 

“More positively, manufacturers continued to expand their employment levels and purchasing activity, suggesting that they remained optimistic about prospects for the second half of the year.”

Latest articles


Dubai launches one-stop hub to streamline government services

People in Dubai can now obtain an Emirates ID, register a company, open a bank account and more under one roof following the opening of the Emirates Government Services Hub (EGSH). Owned by Sheikh Mohammed Bin Maktoum Bin Juma Al Maktoum, a member of the Dubai Royal family, EGSH allows clients to access all essential […]

In association with
Thailand's consul general Kitinai Nutakul visits the Saudi Ministry of Foreign Affairs in Jeddah

Thailand opens investment office in Saudi Arabia

Thailand’s Board of Investment (BOI) is opening its first Middle East office in Saudi Arabia, signaling a deepening of economic ties between the nations after a longstanding diplomatic spat. The office will focus on attracting Saudi investment into Thailand’s targeted industries and supporting Thai entrepreneurs looking to invest in the region, the BOI said in […]

hajj saudi arabia

Saudia reports big rise in international passengers

Saudi Arabia’s national carrier Saudia reported a 24 percent increase in international passengers to 9.1 million in the first half of 2024. There was also a 13 percent rise in the number of flights. The Hajj pilgrimage in June played a large part in the growth.  The number of passengers flying on domestic routes rose […]

renewables target dam

World is off track to meet Cop28 renewables goal

The world is far from reaching its 2030 renewables target, the International Renewable Energy Agency (Irena) said on Thursday. Countries committed at the Cop28 summit in Dubai last year to treble renewables capacity in order to limit global warming to 1.5C. To stay on course global capacity growth needs to accelerate to a minimum rate […]