MediumIV Macro Policy & Sovereign Debt2 November 2026, Monday
Turkish manufacturing PMI slips to 47.3 as contraction drags on
The ISO Türkiye Manufacturing PMI fell from 47.9 to 47.3 in October, its lowest level since June. The index has been below the 50 mark for 31 months, with oil and the exchange rate driving input costs higher.
According to the survey published by the Istanbul Chamber of Industry and S&P Global on 2 November, the fall in new orders was the sharpest in three months. New export orders also lost momentum. Of the 10 sectors tracked, only clothing and leather products raised output. The steepest decline came in non-metallic mineral products.
Rising oil prices, raw material costs and the exchange rate pushed input costs up together; the increase slowed from September but stayed above the annual average. Output prices for electrical and electronic products rose at the fastest pace since February 2024. S&P Global economist Andrew Harker read the easing of job losses to their mildest since June as a relatively positive sign.
The index fell in a month when, according to Barclays, the CBRT raised the lira's monthly rate of depreciation from 1.6% to 1.8%. Consumer prices rose 2.58% month on month in October, and the lira kept appreciating in real terms. Supplier delivery times lengthened only slightly in October; the survey gives no sectoral premium or freight figures.
Talay assessment
Bottom line
The drop to 47.3 shows industry squeezed between weak demand and cost pressure from oil and the currency. A lira appreciating in real terms weakens export orders, while a faster depreciation would raise costs. Talay's reading is that, despite easing job losses, a return above 50 before the end of 2026 is unlikely.
Likely effects
- EmploymentNegative1–6 months
A 31-month contraction is eroding manufacturing jobs; job losses slowed in October, but only two sectors added staff.
- InflationNegativeWeeks
Input cost increases driven by oil and the currency are passing into output prices, keeping price pressure alive ahead of the 12 November Inflation Report.
Possibilities, ranked
- 1Contraction continues, more slowly60%
The PMI stays in a 47–49 range in November, job losses remain moderate, but new orders do not recover.
Watch: The November ISO manufacturing PMI due on 1 December
- 2Deeper downturn25%
Energy and currency costs persist, the PMI drops below 47 and export orders fall fast.
Watch: The PMI's 47.0 threshold and new export orders
- 3Early recovery15%
Energy prices fall, order losses stop and the index rises above 49.
Watch: January Brent futures falling below 90 dollars
Probabilities are calibrated judgement based on the sources, not measurement, and are revised as new information arrives. Not investment advice.
Market reaction
Indicators affected
- ISO manufacturing PMI▼ 47.3
- Months below 50▼ 31