Turkish Manufacturing Activity Declining For 5th Month Amid Lira Crisis - Survey

MOSCOW (Pakistan Point News / Sputnik - 04th September, 2018) The activity of the Turkish manufacturing industry has been decreasing for the fifth consecutive month in August amid the Turkish lira rate drop, the fresh survey data by the Istanbul Chamber of Industry and the IHS Markit research agency showed on Monday.

"Output and new orders slowed on the back of exchange rate weakness, which also contributed to record rises in both input costs and output prices ... Anecdotal evidence suggested that lira weakness was central to challenging business conditions, and contributed to strengthening inflationary pressures. In fact, both input costs and output prices increased to the greatest extents since the survey began in June 2005," the summary of the survey read.

The Istanbul Chamber of Industry said its monthly Purchasing Managers' Index (PMI) fell from 49.0 in July to 46.4 in August with any figure higher than 50.0 indicating the overall improvement of the manufacturing sector.

"Events in Currency markets impacted heavily on the Turkish manufacturing sector during August, causing a pick-up in inflationary pressures and a challenging demand environment. Meanwhile, new export orders rose for the second successive month in August, which is the key positive development revealed by the survey results," Andrew Harker, the associate director at IHS Markit, said in a comment on the survey data.

The Turkish lira has been falling amid the deterioration of Ankara-Washington relations over the imprisonment of US pastor Andrew Brunson, arrested in Turkey in 2016 on suspicion of having ties to the movement of the Islamic cleric Fethullah Gulen, which is accused of orchestrating the 2016 failed military coup in the country.

The Turkish economy has also been affected by US President Donald Trump's decision, announced on August 10, to double tariffs on steel and aluminum imports from Turkey up to 50 and 20 percent, respectively.

On Sunday, Turkish President Recep Tayyip Erdogan called for putting an end to the US Dollar's monopoly in global trade.