ISTANBUL (Reuters) - Turkish factory activity contracted for a seventh consecutive month in September as weak demand slowed down output and purchasing activity, a business survey showed on Monday.
Turkey's Purchasing Managers' Index (PMI) for manufacturing stood at 46.9 in September, down from 47.4 in August, according to the survey by the Istanbul Chamber of Industry and S&P Global (NYSE:SPGI), dropping further below the 50-point line that denotes contracting activity.
Fragile demand conditions and inflationary pressures contributed the most to slowdowns in output and new orders, the panel said.
Contributors to the survey cited Europe as a particular source of demand weakness as new export orders softened the most since May 2020 during COVID-19 lockdowns, the survey showed.
Higher prices for energy and currency weakness caused a spike in input costs, it showed, which in turn pushed output prices higher as costs were passed on to customers.
Manufacturers shed staff for the first time in more than two years in response to softening workloads, the panel said, while both input buying and stocks of purchases moderated.
"The September PMI data provided few reasons for cheer for Turkish manufacturers as demand conditions both at home and abroad (notably in Europe), remained challenging," said Andrew Harker, economics director at S&P Global Market Intelligence.
"The sustained slowdown in new work has had an impact on employment, with firms scaling back workforces for the first time since the initial wave of the pandemic. With manufacturers sitting on increasingly large finished goods inventories, the prospects for production over the coming months appear bleak."