February’s earthquake impacted operations in the Turkish manufacturing sector during the month, as outlined by the findings of the latest PMI® survey data from Istanbul Chamber of Industry and S&P Global. Output was scaled back as some firms paused production due to the earthquake, while new orders were also affected. Supply-chain disruption was also evident.
The headline PMI was unchanged at 50.1 in February, pointing to broadly stable business conditions across the manufacturing sector during the month. That said, the headline index was held above the 50.0 no-change mark by a marked lengthening of suppliers’ delivery times, the index for which is inverted when calculating the overall PMI.
In fact, supplier lead times lengthened to the greatest extent in ten months as the earthquake caused difficulties in the sourcing and delivery of inputs.
As well as impacting supply chains, the earthquake also caused a moderation in output in the sector as some firms paused production. Output eased modestly, albeit at the second-slowest pace in a year.
New orders also moderated to a greater extent due to the earthquake, albeit one that was the second weakest in 16 months. Both total new orders and new export business eased during February. Paused production lines and difficulties sourcing items led manufacturers to scale back their purchasing activity, with stocks of inputs also lower.
Issues with supply and production meant that some firms turned to existing inventories to help meet order requirements. As a result, stocks of finished goods were depleted to the greatest extent since December 2021.
Rises in raw material costs and wages, plus currency weakness, led to a further marked increase in input prices during February. The rate of inflation was little-changed from January and broadly in line with the series average.
In turn, output prices also rose sharply, albeit at a pace that was below the average seen across 2022.
Commenting on the Istanbul Chamber of Industry Türkiye Manufacturing PMI survey data, Andrew Harker, Economics Director at S&P Global Market Intelligence, said:
“The terrible earthquake in February impacted the Turkish manufacturing sector during the month, with supply chains and production lines affected in particular. Hopefully we will see signs of recovery in the affected areas and across the sector as a whole in the months ahead.”