September PMI Data for Turkish Manufacturing Industry Points to Contraction
The drop in the manufacturing PMI to 47.9 in September and price hikes despite rising costs are being evaluated as a risk of stagflation in the economy.
The drop in the Turkish manufacturing industry's September PMI data to 47.9 and price hikes despite rising costs are being evaluated as a signal of a spiral into stagflation in the wider economy.
Contraction and PMI Data in Industry
The Istanbul Chamber of Industry's Turkey Sectoral Purchasing Managers' Index fell to 47.9 in September. The seasonally adjusted PMI value remaining below 50 for nine consecutive months clearly demonstrates the contraction in the sector.
It was observed that the headline PMI index failed to exceed the threshold value during any period in the first nine months of this year. Under the pressure of monetary tightening and geopolitical risks, the industrial sector is experiencing a severe bottleneck.
Cost Increases and Price Pressure
Despite weak demand and melting orders in factories, increases in producers' input costs and final product selling prices reached their highest pace in the last four months.
While the industrial sector experiences a decline in orders and lays off workers, it is forced to continue raising prices as it is crushed under cost pressures.
Growth and Consumption Trend in the Food Sector
According to the September report, while the PMI declined in nine out of ten main sub-sectors, only the food products sector recorded growth with a value of 51.5. This situation indicates that society is focusing its budget on food, a primary vital necessity.