The PMI increased by 7.5 points from 33.4 in April, according to the report by the Istanbul Chamber of Industry, prepared in collaboration with London-based global data firm IHS Markit.
The report noted that the disruption in the country’s manufacturing sector remained in May due to the coronavirus pandemic.
“Output and new orders slowed sharply again, albeit to lesser extents than in April, while firms scaled back employment and purchasing,” it said.
Touching on the U.S. dollar/Turkish lira exchange rate, it highlighted “the weakness of Turkish lira against U.S. dollar” increased input costs sharply.
It also stressed that the inflation rate was the fastest during a year, and it raised selling prices.
“Manufacturers scaled back employment for the second month running, albeit at a softer pace and one that was much weaker than those seen for output and new orders as the majority of companies kept staffing levels unchanged,” it added.
The report recalled that transportation problems due to the measures to stem the spread of COVID-19 prolonged delivery times sharply and receiving items from foreign countries was especially difficult in May.
Andrew Harker, an economist at IHS Markit, said the country’s manufacturing sector remained to be affected by the pandemic in May. “Rates of moderation softened, however, suggesting that the sector is on the road to recovery.
“As long as the virus continues to be brought under control, therefore, the move back to growth should follow in the months ahead.”
The manufacturing PMI — derived from indicators for new orders, output, employment, suppliers’ delivery times and stocks of purchases — is a composite single-figure indicator of manufacturing performance.
An index value above 50 indicates the sector is growing, while a figure below 50 signals a contraction.
Mustafa Varank, the Turkish industry and technology minister, said the index in May returned back from the deepest level — 33.4 in April — and it is a good news for the sectoral recovery and the improvement of expectations.
“With the COVID-19 measures being adhered and the outbreak waning, we expect strong recovery in the last two quarters,” the minister added.
Hurriyet Daily News