Türkiye’s Factory Activity Ekes Out Growth, Global Recovery…
The factory activity in Türkiye expanded very slightly in
January after shrinking for 10 straight months, while activity
across Europe and Asia contracted again, surveys showed Wednesday,
underscoring the fragility of the global economic recovery,
trend reports citing
daily
sabah .
Still, both output and new orders continued to contract in
Türkiye, while data showed factories in the eurozone at least may
have passed the trough.
Türkiye’s Purchasing Managers’ Index (PMI) for manufacturing
rose to 50.1 last month from 48.1 in December, inching above the
50-point line that separates expansion from contraction, the
Istanbul Chamber of Industry (ISO) and S&P Global said.
Some firms contributing to the survey pointed to some
improvement in demand, although it remained fragile amid price
rises, while output and new orders both shrank at a much slower
rate than in December.
The panel showed that employment increased for the third month
running, enabling firms to reduce backlogs of work, the panel
showed.
Input cost inflation rose sharply in January primarily due to a
rise in the minimum wage, the survey showed, with higher material
costs and currency weakness also putting a burden on
manufacturers.
In turn, firms increased their prices, with the rate of output
price inflation accelerating to a seven-month high.
‘Business conditions were stable in January, while the upward
trajectories of the output and new orders indices amid signs of
demand improving provide hope that expansions can be recorded in
the coming months,’ said Andrew Harker, economics director at
S&P Global Market Intelligence.
‘While input cost and output price inflation did pick up due to
the rise in the minimum wage, they remained some way below the
highest points seen in 2021 and 2022.’
Price pressures slackened, and the fall in demand moderated in
the eurozone, driving a surge in optimism. The bloc eked out growth
in the final three months of 2022, managing to avoid a recession,
official data showed on Tuesday.
S&P Global’s final manufacturing PMI climbed to a five-month
high of 48.8 in January from December’s 47.8, in line with a
preliminary reading but still below the 50 mark.
‘We think in, general, the worst is now past for both inflation
and the activity front. The activity is not softening; it is going
back up, so expectations are for a rebound,’ said Mateusz Urban,
Senior Economist at Oxford Economics.
Manufacturers in Germany, Europe’s largest economy, started 2023
with a slightly brighter outlook for the year ahead despite demand
continuing to fall as inflation and supply chain problems
eased.
In France, the bloc’s second-biggest economy, factory activity
returned to growth, albeit not as strongly as initially
forecast.
But British manufacturing business shrank for a sixth month in
January, kicking off a tough 2023 when the country’s economy looks
to fall into a recession.
Easing price pressures will, however, be welcomed by central
bank policymakers. Soaring inflation – initially described as
transient – has proved far more sticky than thought and prompted
aggressive monetary tightening.
