Fashion
Turkiye’s manufacturing sector weakens in March amid Middle East war
The latest reading, the lowest in five months, reflected sharper contractions in output and new orders, as escalating tensions in the Middle East intensified inflationary pressures and weighed on demand. The sector has now remained in contraction territory for two consecutive years, S&P Global said in a press release.
Turkiye’s manufacturing PMI fell to 47.9 in March from 49.3 in February, marking a five-month low and extending the sector’s contraction.
The slowdown was driven by weaker demand, rising inflation and supply disruptions linked to the Middle East conflict.
Output and new orders declined sharply, while firms cut employment and purchasing activity amid higher input costs and ongoing uncertainty.
New business and export orders declined at a faster pace during the month, with firms citing weakened demand linked to geopolitical uncertainty and rising prices. This led manufacturers to scale back production at the sharpest rate since November.
Inflationary pressures strengthened significantly, driven by higher costs of fuel, oil, freight, and raw materials. Input costs and output prices rose at the fastest rates in 23 months and 25 months respectively, adding further strain on operating conditions.
Supply chains also came under pressure, with suppliers’ delivery times lengthening to the greatest extent since August 2024 due to material shortages and transportation disruptions. As demand softened, firms reduced employment to the largest degree in six months, while also cutting purchasing activity and inventory levels in response to weaker output requirements.
Andrew Harker, economics director at S&P Global Market Intelligence, said: “The Turkish manufacturing sector suffered something of a setback in March, after conditions had looked to be on the path to becoming more favourable in February. The more pronounced slowdown in the sector at the end of the first quarter can largely be linked to the war in the Middle East, which acted to push up costs for inputs including fuel and oil, and also disrupted supply chains.”
“Therefore, the near-term fortunes of the sector will likely depend on how long the conflict persists and the ramifications for global price and supply conditions,” added Harker.
Fibre2Fashion News Desk (SG)