2020.06.0110:57:00UTC+00Turkey Manufacturing Sector Contraction Slows In May

Turkey's manufacturing sector contracted in May amid coronavirus pandemic, but the pace of decline slowed from April, survey data from IHS Markit showed on Monday.

The Istanbul Chamber of Industry Turkey manufacturing Purchasing Managers' Index, or PMI, rose to 40.9 in May from 33.4 in April. Any reading below 50 indicates contraction in the sector. Output and new orders continued to report sharp slowdown as Covid-19 pandemic disrupted business and hamper demand. Employment decreased for the second straight month, albeit at a softer pace.

Stock of finished goods was lowered in May, and lack of new orders led firms to moderate their purchasing activity. Suppliers' delivery time lengthened sharply in May.

Weakness of the Turkish currency against the US dollar led to a sharp and accelerated increase in input costs. The rate of inflation was the fastest in a year and manufactures raised their selling prices.

"The Turkish manufacturing sector continued to be buffeted by the effects of the COVID-19 pandemic in May, according to the latest PMI data, preventing a swift rebound following a sharp slowdown in April," Andrew Harker, economics director at IHS Markit, said.

"As long as the virus continues to be brought under control, therefore, the move back to growth should follow in the months ahead," Harker added