The Turkish manufacturing sector, based on the February Manufacturing PMI survey, has been in expansion for an impressive six consecutive months. The outturn declined slightly however to 53.5 from 54.0 in January. The key sub indices of output, new orders and employment remained well in expansionary territory, with the employment component in particular improving month on month. The trend in the orders-to-inventories ratio improved for a sixth consecutive month as new orders remained strong, while inventories moved into contractionary territory.


Although the PMI readings have recently been strong, industrial production numbers have not been so impressive, with year-on-year growth rates in contraction for three of the last five monthly outturns. The central bank in its latest MPC minutes noted that this is likely to be due to ongoing inventory depletion, with stocks of finished products declining during the final quarter of 2012. February PMI data suggests that this trend has continued, as inventories declined on the month. The CBRT expects a recovery in industrial production to be reflected in the second quarter.
Source BNE