The Istanbul Chamber of Industry Turkiye manufacturing purchasing managers' index (PMI), produced by S&P Global, fell for the fifth consecutive month in July, dropping to 47.2 from 47.9 in June. This decline indicates a significant slowdown in business conditions within the sector, marking the steepest downturn since last November.

Central to the latest moderation in the health of the sector was a marked softening of new orders amid challenging market conditions. In fact, new business moderated to the joint-largest extent in 20 months, equal with that seen in November 2023. New export orders also slowed to a greater degree at the start of the third quarter.

Muted demand conditions led manufacturers to scale back production for the fourth month running, and at the fastest pace since November 2022. Shortages of workers also reportedly impacted negatively on production volumes.

Employment levels also eased in line with softer new orders, but the slowdown was also reflective of staff resignations and retirements. The moderation of workforce numbers was the most marked in 21 months.

Input costs were up sharply in July, reflecting higher prices for raw materials and oil, as well as weakness of the lira against the US dollar. The rate of inflation quickened from June, as was the case with selling prices. That said, the rise in charges was still relatively muted.

Meanwhile, suppliers' delivery times lengthened again amid difficulties sourcing raw materials and high transportation costs.

Purchasing activity was scaled back markedly, and to the largest degree since November 2022. Meanwhile, stocks of both purchases and finished goods also moderated.

Turkish manufacturers posted a further slowdown in output during July, extending the current sequence of moderation to four months. Moreover, the latest easing of production was the most pronounced since November 2022. Anecdotal evidence suggested that weak demand was the principal factor behind lower output, with shortages of workers also mentioned.

A response to softer new orders, resignations and retirements all contributed to a further scaling back of workforce numbers at the start of the third quarter. Employment eased for the sixth consecutive month. Although modest, the latest moderation was the most marked since October 2022.

Fibre2Fashion News Desk (DP)