Turkey’s PMI Data Shows Broad Industrial Weakness

Turkey’s manufacturing downturn deepened in September 2025, with the Istanbul Chamber of Industry (İSO) Manufacturing Purchasing Managers’ Index (PMI) falling to 46.7 from August’s 47.3. The latest reading marks the 15th consecutive month of contraction, signaling persistent challenges for the industrial sector amid weak demand and a depreciating lira.

Demand Weakness Hits Orders and Exports

Survey respondents highlighted the strain from fragile demand conditions. New domestic and export orders both declined, dragging down production volumes. Companies, facing shrinking order books, were able to clear backlogs at the sharpest pace in nearly a year.

For the first time in three months, post-production inventories rose, reflecting falling demand. However, firms adopted a cautious approach to hiring and input purchases, instead drawing down existing inventories. As a result, employment, purchasing activity, and pre-production inventories all fell sharply in September.

Currency Pressures Drive Costs Higher

The lira’s depreciation exacerbated cost pressures, pushing input cost inflation to a three-month high. This filtered into output charges, with companies raising selling prices at the fastest pace since April 2024. Cost inflation was most pronounced in the food sector, where sharp increases in both input and output prices were recorded.

Sectoral Breakdown: Food Gains, Textile Struggles

The İSO Sectoral PMI report revealed contrasting trends across industries. Out of 10 monitored sectors, eight saw output decline in September. The only exceptions were food products and, to a lesser extent, paper and wood products, which managed to expand production.

• Food sector: Registered the strongest rise in new orders in 19 months, boosting output.

• Textiles: Remained the weakest performer, suffering the steepest contraction in production and employment despite slightly easing its pace of decline compared to August.

• Machinery and metals: Saw marginal improvement in export demand, bucking the broader weakness.

• Employment: Rose slightly in food and electronics, but declines in textiles outweighed gains.

The divergence highlights that while food production shows resilience, most sectors continue to grapple with shrinking demand and fragile external markets.

Costs and Prices: Sharpest Rise in Food

Input inflation accelerated across much of manufacturing, with the most severe increases in food products, where companies also recorded the sharpest hikes in selling prices. In contrast, textile firms continued to cut prices for a seventh straight month in an attempt to stimulate demand, making it the only sector lowering output prices.

Expert Commentary: “Familiar Pressures Persist”

Commenting on the figures, Andrew Harker, Economics Director at S&P Global Market Intelligence, said: “September’s İSO Turkey Manufacturing PMI data once again highlighted familiar themes, consistent with the rest of 2025. Demand conditions remained challenging, leading to further reductions in output, employment, and purchasing activity. Meanwhile, although lira weakness led to some uptick in inflation, price pressures remained relatively contained.”

Outlook: Structural Challenges Remain

With PMI stuck below the neutral 50 threshold for over a year, Turkey’s manufacturing industry continues to face a prolonged downturn. Weak domestic consumption, subdued foreign demand, and rising input costs—exacerbated by currency weakness—paint a difficult picture heading into the final quarter of 2025.

Unless demand revives significantly, the sector risks extended contraction, with only food production providing a rare bright spot in an otherwise troubled landscape.