Turkey Manufacturing Downturn Eases

The Istanbul Chamber of Industry Türkiye Manufacturing PMI rose to 47.7 in July from 47.1 in June, but remained below the 50.0 threshold and signaled a deterioration in manufacturing conditions for the 28th consecutive month. New orders declined further amid subdued market conditions and price pressures, while international demand also weakened due to the war in the Middle East. Output contracted for a second straight month, prompting firms to reduce employment, purchasing activity, and inventories. Meanwhile, supplier delivery times lengthened at the slowest pace in nine months as softer input demand eased supply chain pressures, although delays in sea transportation persisted. On prices, input cost inflation slowed for the third consecutive month to its weakest since November 2025 despite higher oil and raw material costs, while selling price inflation eased to its lowest level of 2026 so far.

The Istanbul Chamber of Industry Türkiye Manufacturing PMI fell to 47.1 in June from 49.8 in May, signaling a sharper deterioration in manufacturing conditions and extending the sector's downturn to 27 consecutive months. Output contracted again after returning to growth in May, amid weaker demand and market uncertainty stemming from the war in the Middle East. New orders declined further, while new export orders returned to contraction after expanding in May. Employment and purchasing activity also declined in response to softer demand. Meanwhile, suppliers' delivery times lengthened again as the conflict disrupted raw material supplies, although the deterioration was the least marked since February. On prices, both input cost and output price inflation eased for a second straight month, with input cost inflation slowing to the weakest since November despite higher oil and raw material costs. Lastly, inventories of purchases and finished goods declined amid muted demand.

The Istanbul Chamber of Industry Türkiye Manufacturing PMI rose to 49.8 in May 2026 from 45.7 in April. The reading was the highest since March 2024 and signaled a near-stabilization in manufacturing sector conditions. Output returned to growth after falling sharply in April. External demand also improved, with new export orders rising, ending a 20-month period of decline. This helped to cushion the drop in total new orders, which nevertheless fell slightly during the month. Employment levels were reduced for another month, albeit to the smallest extent so far this year. Purchasing activity rose for the first time in over two years as some firms sought to build inventories amid rising costs and supply-chain disruptions caused by the Middle East war. Suppliers' delivery times lengthened further, with vendor performance deteriorating for the seventh month. While input costs continued to rise sharply, the rate of inflation eased, a trend that was also reflected in output prices.