Ill-effects of the conflict in the Middle East in March snuffed out the beginnings of a possible recovery in Turkish manufacturing, according to the latest Istanbul Chamber of Industry Turkiye Manufacturing Purchasing Managers’ Index (PMI), released on April 1 by S&P Global.

The war caused supply-chain delays, with suppliers' delivery times lengthening to the largest extent in over a year-and-a-half, said S&P.

After hitting a 22-month high of 49.3 in February, the headline PMI dropped to 47.9 in March, its lowest level in five months (readings below 50.0 denote a deterioration in performance).

Andrew Harker, economics director at S&P Global Market Intelligence, said: "The Turkish manufacturing sector suffered something of a setback in March, after conditions had looked to be on the path to becoming more favourable in February.

“The more pronounced slowdown in the sector at the end of the first quarter can largely be linked to the war in the Middle East, which acted to push up costs for inputs including fuel and oil, and also disrupted supply chains.

“Therefore, the near-term fortunes of the sector will likely depend on how long the conflict persists and the ramifications for global price and supply conditions.”

The health of Turkey’s manufacturing industry has now worsened in each month throughout the past two years.

March data pointed to sharper slowdowns in both total new business and new export orders, in some cases linked to the impact on market demand of the uncertainty caused by the war in the Middle East, said S&P.

Price increases also reportedly contributed to a slowdown in new orders.

Added S&P: “Muted demand and price pressures combined to result in a further moderation of manufacturing production, with output scaled back to the largest extent since last November.

“The aforementioned price pressures were often linked by panellists to the war in the Middle East, which led to higher costs for freight, fuel and oil. Higher raw material prices were also reported.

“As a result, input costs and output prices increased at the sharpest rates in 23 and 25 months respectively.”

Suppliers' delivery times were also hit by the war, through material shortages and disruption to transportation, said the survey compiler, saying lead times lengthened to the largest degree since August 2024.

“With new orders easing and output requirements softening, manufacturers in Turkiye scaled back employment to the largest extent in six months and also lowered purchasing activity and inventory holdings,” said S&P.