Turkey Manufacturing Contracts at Fastest Pace in 4 Months

The Istanbul Chamber of Industry Türkiye Manufacturing PMI edged down to 47.3 in October 2026 from 47.9 in September. This marked the 31st consecutive month of contraction, with the downturn being the most pronounced since June. Challenging market conditions led to further slowdowns in both output and new orders. Employment also continued to decline amid lower workloads and staff resignations, although the pace of job cuts was modest and the slowest since June. Regarding prices, input costs increased due to higher oil prices, increased raw material costs, and unfavorable exchange rate movements. The rate of inflation eased from September but remained sharp and was faster than the average for the year so far. Similarly, output prices rose markedly again. Supplier performance has now deteriorated on a monthly basis throughout the past year, although the latest lengthening of delivery times was modest.

The Istanbul Chamber of Industry Türkiye Manufacturing PMI fell to 47.9 in September 2026 from 48.1 in the previous month. This marked the thirtieth consecutive month in contraction territory, as new orders eased and demand remained subdued amid uncertainty stemming from the conflict in the Middle East. In response, manufacturers reduced output for a fourth straight month. Firms also cut employment, purchasing activity, and inventories as they adjusted operations to weaker demand conditions and softer inflows of new business. On the pricing front, input cost inflation accelerated to a four-month high, driven by higher fuel, energy, and transportation expenses linked to the Middle East conflict, alongside rising raw material prices. Manufacturers subsequently raised selling prices at a faster pace as increased costs were passed on to customers.

The Istanbul Chamber of Industry Türkiye Manufacturing PMI ticked up to 48.1 in August 2026 from 47.7 in July, reaching its highest level in three months. The reading signalled a modest easing in the deterioration of business conditions, although the Middle East conflict continued to weigh on the sector, keeping demand muted amid uncertainty. Both total new orders and new export business declined, albeit at slower rates than in July. In turn, manufacturers scaled back production for the third consecutive month, although the pace of contraction was modest. Firms also reduced employment and purchasing activity, with both falling at solid rates that were sharper than in July. Stocks of both purchases and finished goods also dropped further. Input cost inflation accelerated to a three-month high, driven by higher fuel and oil costs as well as rising raw material prices. This prompted firms to raise their selling prices. Moreover, suppliers' delivery times lengthened.