Turkey’s April PMI in the contraction territorry

According to ITO PMI, the slowdown in the economy became more evident after the local elections along with additional monetary tightening.

Headline ITO PMI, which was recorded as 50.0 in March, declined to 49.3 in April, falling below the threshold value. Industrial activity conditions slowed down for the first time in the last three months.

– As new orders slowed down, production also slowed down. Domestic orders fell as price hikes and high interest rates had a negative impact on demand. External demand also fell, again in line with price increases.

– Production increased in only two of the ten sectors monitored: Food products and non-metallic mineral products. Food products not only posted the highest increase in output for the third month in a row, but also recorded the strongest growth in 10 months. Machinery and metal products, where production contracted sharply in April after a moderate increase in March, was the sector with the most significant slowdown.

– Employment remained unchanged compared to the previous month. It had declined in February and March.

– Firms increased their inventories in anticipation of better demand in the coming months. Despite the decline in new orders, the recent expansion in production led to an increase in final product stocks.

– Inflationary pressures remained strong, albeit at the lowest level since the beginning of the year. Input prices continued to rise sharply due to the depreciation in the Turkish lira as well as the increases in raw material and logistics prices. A similar development was also observed in selling prices.

– External demand conditions, on the other hand, remained generally subdued, with clothing and leather products being the only sector that managed to increase new export orders in April.