PLASFED/Black Sea: Weakness in the Manufacturing Sector Persists, Industrialists Delay Investment Plans
According to Turkey's Manufacturing PMI data, the headline PMI rose from 45.8 in October to 48.3 in November. This indicator, which remains below the threshold level, is observed to have reached its mildest level since May. Ömer Karadeniz, the Chairman of the PLASFED Board, stated that the noticeable improvement in the Turkish manufacturing sector's PMI data in November is encouraging. However, he emphasized that the overall weakness in the manufacturing industry continues, warning that if necessary measures are not taken, manufacturers will postpone their investment plans, leading to a general stagnation.
Due to ongoing challenging market conditions both globally and domestically, a downward trend in manufacturing sector performance has been observed since the beginning of the year. Continuous decreases in manufacturing output are leading to declines in employment and purchasing activities. The weakness of the Turkish lira and inflationary pressures are also contributing to increased input costs.
According to the results of the ISO Turkey Manufacturing PMI survey, the headline PMI increased from 45.8 in October to 48.3 in November, which is considered a leading indicator of economic growth. All figures measured above the threshold of 50 indicate improvements in the sector, and November's Manufacturing PMI Index, remaining low at 48.3, suggests continued deterioration in operating conditions.
Ömer Karadeniz, the Chairman of the Plastic Industrialists Federation (PLASFED), mentioned the significant improvement signs in the Turkish manufacturing sector's PMI data for November as encouraging. However, he pointed out that overall PMI data indicates the manufacturing sector has entered a contraction zone, highlighting that one of the primary reasons for the slowdown in growth is the weakness in the manufacturing sector. Karadeniz noted that factors such as tight financing conditions, geopolitical tensions, and trade protectionism negatively affect the manufacturing industry, stating that without necessary measures, manufacturers might delay their investment plans. He explained that companies are shelving their investment and growth plans to preserve current resources and minimize costs, urging for increased support for the industry.
“The greatest strength of the Turkish industrialist is production,” Karadeniz stated, highlighting their capability to write new stories under any circumstances and acknowledging the considerable sacrifices made to achieve production. He expressed that the current situation is not sustainable, warning that “Manufacturers are losing their competitive edge day by day. Both the public sector and private stakeholders must show the necessary dedication.”
"Progress in the fight against inflation is encouraging," he noted, emphasizing the positive outcome of economic policies followed over the last two years in the fight against inflation. He remarked, “As a result of the measures taken, the country risk premium has decreased, Central Bank reserves have increased, and the current account deficit has also narrowed. With the Central Bank's determined efforts, we can foresee further declines in inflation. Our greatest wish is that the downward trend in inflation fully materializes."
The PLASFED Chairman asserted that while macroeconomic stability is essential, it is not sufficient for the increasingly challenging global competition. He stated that by supporting our production structure with high-tech products and green economic transformation, we can position ourselves in the international arena.
Karadeniz highlighted that to enhance our competitiveness and improve our growth performance, we must increase the share and export of high-tech production. He concluded, “Steps taken for the industry will first lead to production and then to employment. The winning entity will be the Turkish economy.”