Türkiye’s Manufacturing PMI Rises to 47.3 in August

The Istanbul Chamber of Industry (İSO) Türkiye Manufacturing PMI survey, conducted by S&P Global, revealed that the headline index rose to 47.3 in August 2025, up from 45.9 in July. Despite the improvement, the figure remained below the neutral 50.0 threshold, signaling that overall manufacturing conditions continued to weaken, albeit at the slowest pace since April.

“Turkish manufacturers continued to face challenging business conditions in August, leading to a marked reduction in employment. However, the latest PMI data also gave some positive signals, with both production and new orders declining at softer rates. If these trends continue in the coming months, the sector may see a brighter outlook toward the end of the year,” said Andrew Harker, Economics Director at S&P Global Market Intelligence.

Demand and Orders Show Signs of Stabilizing

The report noted that demand weakness persisted, with new orders declining again in August. However, the pace of decline was the slowest since February 2025. New export orders also fell, and at a sharper pace than overall demand, reflecting continued difficulties in external markets.

Similarly, production contracted, but at the slowest rate in six months. The downturn that began in April 2024 has yet to be reversed, but manufacturers are showing cautious optimism as the pace of decline eases.

Employment and Input Activity

The improvement in output and orders was not enough to halt labor market pressures. Firms cut employment at the fastest rate since April 2020, reflecting reduced workloads. Purchasing activity also slowed further, leading to declines in input inventories and a second consecutive drop in finished goods stocks.

Input costs rose sharply in August, with respondents attributing the increase largely to the weaker Turkish lira. In turn, manufacturers raised selling prices, though output price inflation eased to its lowest point since early 2025.

Sectoral PMI: Diverging Trends

The İSO Türkiye Sectoral PMI report showed that conditions remained generally stagnant across industries:

• Production declined in 8 out of 10 sectors, slightly better than July’s 9.

• Basic metals saw the fastest growth since April 2023, while wood and paper products recorded their first expansion in five months.

• Textiles registered the sharpest decline in both output and new orders, with the sector’s workforce shrinking at the fastest pace since the survey began in January 2016.

• Chemicals, plastics, and rubber also reported record declines in employment.

• Machinery and metal products, along with basic metals, were the only sectors to post job growth.

• On the pricing front, two sectors cut selling prices in August: textiles and wood/paper products, the latter recording the steepest price reduction since the survey began.

• In contrast, machinery and metal products posted the sharpest output price increase.

Conclusion: Modest Improvement but Outlook Still Fragile

The August PMI results suggest that Türkiye’s manufacturing sector remains under strain, but with tentative signs of stabilization. Softer contractions in output and new orders offer cautious optimism, though employment cuts, weak demand, and higher input costs remain pressing challenges.

If the slowing pace of decline continues, manufacturers could see a more favorable environment by late 2025, but much will depend on domestic demand, currency stability, and external market conditions.