Türkiye’s Manufacturing Slump Deepens: PMI Hits 8-Month Low at 46.7

The downturn in Türkiye’s manufacturing sector accelerated in June 2025, with the Purchasing Managers’ Index (PMI) dropping to 46.7, marking its lowest level in the past eight months. According to the Istanbul Chamber of Industry (ISO) and S&P Global, the sustained fall below the neutral 50-point threshold signals persistent deterioration in industry activity since April 2024.

This latest PMI data reveals that the sector is under broad-based strain, as demand weakness continues to weigh on production, employment, and exports.

Demand Contraction Enters Second Year

Both domestic and external demand slumped in June. The new orders sub-index slipped from 46.3 to 46, while new export orders plummeted from 47.7 to 45.5, the sharpest decline in the past three months. Notably, the contraction in new orders has now persisted for 24 consecutive months, highlighting prolonged market stagnation.

Production and Employment Show Sharp Declines

Weak demand has forced manufacturers to scale back production, with the output sub-index falling from 46.6 to 44.4, the steepest drop since October 2024. The labor market also suffered, as the employment sub-index declined from 48.4 to 47.2, marking the fastest contraction in nine months. Purchasing activity saw its most significant decline since September 2024.

Currency Pressures and Geopolitical Risk Drive Cost Increases

Input cost inflation inched up during June, driven by the Turkish lira’s depreciation and rising geopolitical tensions, particularly developments linked to Iran. However, due to weak consumer demand, firms refrained from aggressive pricing, resulting in the lowest final product price increases recorded this year.

Glimmers of Hope for H2 2025 Recovery

Despite the bleak performance, there are cautious signs of optimism. Andrew Harker, Economics Director at S&P Global Market Intelligence, noted that although firms curtailed production due to a weak sales environment, finished goods inventories rose for the first time in three months—potentially indicating readiness for a recovery. “The first half of the year has been tough, but hopes remain for a rebound in the second half,” Harker added.