Daijiworld Media Network - Istanbul

Istanbul, Feb 2: Turkey’s manufacturing sector continued to face headwinds in January, with new orders and production remaining in contraction territory while inflationary pressures intensified, according to a survey released by S&P Global on Monday.

The Istanbul Chamber of Industry Turkey Manufacturing Purchasing Managers’ Index (PMI) declined to 48.1 in January from 48.9 in December, staying below the crucial 50.0 mark that separates growth from contraction. This marked the 22nd consecutive month of contraction in the sector.

The survey indicated muted demand conditions, with new orders easing further, though at a modest pace. New export orders weakened more sharply than overall new business, highlighting ongoing challenges in global markets.

Manufacturers responded to weaker demand by cutting output, with the pace of production decline accelerating compared to December. In line with lower output levels, firms also reduced employment, purchasing activity, and inventories of both inputs and finished goods at the beginning of the year.

At the same time, inflationary pressures intensified. Input costs rose sharply, with the rate of inflation accelerating due to higher raw material prices, particularly metals. As a result, manufacturers increased output prices as they passed on rising costs to customers.

Commenting on the survey, Andrew Harker, Economics Director at S&P Global Market Intelligence, said, “The Turkish manufacturing sector began 2026 in a similar position to that which it ended 2025, seeing modest slowdowns in new orders and production as business conditions remained challenging.”

He added that firms would be hoping for a moderation in these pressures in the coming months to enable a smoother path toward growth.