Turkish manufacturing contracts further in December: Index

Turkish manufacturing contracts further in December: Index

ISTANBUL - Reuters
Turkish manufacturing contracts further in December: Index Turkey’s manufacturing, which represents around a third of the country’s economy, slipped further into contraction in December, falling to its lowest level in four months, a survey showed on Jan. 2.

The manufacturing Purchasing Managers’ Index (PMI) slipped to 47.7 in December from 48.8 in November, according to the Istanbul Chamber of Industry (İSO) and HIS Markit. Anything below 50 indicates contraction; anything above, expansion.

“The Turkish PMI remained below 50.0 in December, mainly reflecting the output and new orders components,” Markit senior economist Trevor Balchin said. 

“More positively, employment grew further during the month. The depreciating lira was again responsible for an intensification of cost pressures, with input price inflation accelerating further after a relatively moderate trend in the third quarter,” he added. 

The depreciation of the lira continued to put upward pressure on manufacturing input prices in December, with inflation continuing its upward trend, Markit said. As a result, output prices charged by manufacturers also rose at a higher rate, compared with the previous period.

The lira has hit a series of record lows this year, hurt by widening domestic concerns, particularly over security and a government crackdown following the failed coup in July.

The lira has lost around 20 percent of its value against the dollar over the last year.

Eurozone figure hits 5-year highs

Meanwhile, the eurozone manufacturing PMI figure for December came at 54.9 points, up from 53.7 in November. With a result above 50 indicating expansion, the result was the best since April 2011, as reported by Agence France-Presse. 

The surveys of companies about their performance and outlook are an important early indicator of how economies are faring before official data is collected and processed.

Manufacturing in the Netherlands and Austria were also at 68-month highs, with France close behind at a 67-month high, according to IHS Markit.

In another encouraging sign for France, which has been suffering from high unemployment, job creation was at its fastest rate since June 2011.

German manufacturing was at a 35-month high in December, and Italian manufacturing hit a 6-month high despite the political uncertainty of a change of government and a bank bailout.

China’s official PMI, announced on Jan. 1, showed manufacturing activity slowed slightly in December as the world’s second largest economy stabilizes.