Growth momentum in Turkey’s manufacturing sector improved sharply in January as output, new orders and exports all returned to growth, IHS Markit and the Istanbul Chamber of Industry (ISO) said in a monthly survey on Monday.
Turkey’s manufacturing PMI, a key gauge of the industry’s performance, rose to 54.4 this month from 50.8 in December, the strongest improvement since July.
Job creation was the fastest since December 2017, according to the survey.
“Positive vaccine news contributed to the more buoyant picture in January,” said Andrew Harker, economics director at IHS Markit. “As with economies all over the world, the near-term fortunes of the sector will depend on developments related to the pandemic and vaccine roll-out.”
There was, however, severe disruption to supply chains during January, with delivery delays linked to raw material shortages, difficulties importing items and COVID-19 restrictions, IHS and the ISO said.
The supply problems meant that input costs continued to rise steeply. But the rate of inflation eased to a six-month low due to a relatively stable exchange rate.
“A similar picture was seen with regards to output prices, with charges rising sharply but at a slower pace,” IHS Markit and the ISO said.
Turkish producer price inflation climbed to 25.2 percent in December, the highest level since mid-2019, after the lira slumped to a record low of 8.58 per dollar the previous month. The currency has since strengthened to trade at around 7.25 against the U.S. currency.
Producer price inflation has pressure headline annual consumer price increases, which accelerated to 14.6 percent last month.