Turkey’s factory activity barely grew for a second straight month in February, a survey showed on Tuesday, amid sharp price rises and a slowdown in production due to outages of natural gas and electricity.
The Purchasing Managers’ Index (PMI) for Turkish manufacturing stood at 50.4 in February, slipping from 50.5 in January, data from the Istanbul Chamber of Industry (ISO) and IHS Markit showed.
It has held above the 50.0 mark that denotes growth for nine consecutive months.
New orders continued to ease for a fifth month in February due to market uncertainty and sharp price rises, the panel said. Inflation in Turkey neared 50% in January, mainly due to a currency slide at the end of last year.
Input costs rose sharply last month due to higher prices for raw materials, energy and transport and rising wages, some of which were exacerbated by currency weakness, it said, adding that this led to higher selling prices.
Last month, Iran cut gas flows to Turkey due to a technical failure. Planned gas and electricity cuts at industrial facilities caused some firms to halt production.
The outages hit production volumes, and output softened for a third consecutive month, the panel said. Backlogs also increased due to energy shortages, as well as delivery delays.
Manufacturers expanded their staffing levels to improve operating capacity, it said, leading to a rise in employment for a 21st consecutive month.
“Disruption to electricity and natural gas supply added to the challenges being faced by Turkish manufacturers and contributed to a slowdown in output during February,” said Andrew Harker, economics director at IHS Markit.
“Meanwhile, the latest PMI data suggested that inflationary pressures may have peaked around the turn of the year, though cost increases remained sharp midway through the first quarter.”