ANKARA: Turkey’s Purchasing Managers’ Index (PMI) which measures the growth of the manufacturing sector plummeted to a six-year low in March after falling for three consecutive months, while Turkish exports decreased by 13.4 percent in March, according to separate surveys hinting at deteriorating market conditions.
Following the release of the surveys, the Turkish lira fell from 2.59 to 2.6034 against the US dollar and depreciated against the euro, falling from 2.79 to 2.8028.
A survey conducted by financial information company Markit for HSBC revealed on Monday that the PMI for Turkey fell from 49.6 in February to 48 in March — the lowest reading since April 2009.
“The March survey results suggest that February’s downturn in the Turkish manufacturing sector was more than just a weather-related blip. Output fell at the fastest rate since early 2009, driven by a steeper drop in new business,” said Trevor Balchin, a senior economist at Markit. The government and its supporters have long been arguing that unfavorable weather conditions experienced during last summer and winter had led to a downturn in production and a slowdown in the overall economy.
Markit’s survey gathered data from purchasing executives in more than 400 manufacturing companies who responded to questionnaires prepared by the compiler. The PMI index is a composite of five sub-indices where a reading above 50 indicates an overall increase and below 50 an overall decrease.
According to the report, four of five sub indices of the PMI stood below 50, indicating a deterioration in each of those four categories. The report states that new orders received by Turkish manufacturers fell in March, for the third consecutive month and that the rate of decline in the latest period is the fastest since August 2011.
The same data also indicated stagnation in manufacturing employment in March, while input costs increased the most since March 2014 due to the strengthening US dollar.
The overall volume of inputs, in the meantime, remained unchanged in March. The stocks of purchases, however, showed a rise in March as a result of weak demand, the data said. Yet, the volume of output fell for the third month running and at the strongest rate since April 2009.
