FX.co ★ Turkey Manufacturing Contraction Deepens

The Istanbul Chamber of Industry Türkiye Manufacturing PMI fell to 47.1 in June, down from 49.8 in May, indicating a sharper deterioration in operating conditions and extending the sector’s downturn to 27 consecutive months. Output returned to contraction following a brief expansion in May, amid weaker demand and heightened market uncertainty linked to the war in the Middle East. New orders declined further, while new export orders fell back into contraction after having expanded in May. In line with softer demand, both employment and purchasing activity were reduced. At the same time, suppliers’ delivery times lengthened again due to conflict-related disruptions to raw material supplies, although the extent of the delays was the mildest since February. On the price front, both input cost and output price inflation eased for the second consecutive month, with input cost inflation slowing to its weakest pace since November despite higher oil and raw material prices. Finally, inventories of both purchases and finished goods decreased, reflecting subdued demand.