"PMI Falling, Production Capacity at Risk"

PLASFED Chairman Ömer Karadeniz commented on İSO Manufacturing PMI data.

The July 2025 Turkey Manufacturing PMI and Sectoral PMI data released by Istanbul Chamber of Industry clearly reveal the challenging situation in the manufacturing sector. The PMI, declining for the third consecutive month to 45.9, signals the most pronounced slowdown since October 2024. Deterioration in operating conditions has now extended to the 16th month.

The contraction in new orders for 25 consecutive months and July's decline being the sharpest in the past four months are clear indicators of persistent problems in domestic and external demand. Under these conditions, manufacturers have been forced to reduce production, employment and purchasing activities, while attempting to run down inventories.

Sectoral data confirm this picture. While exchange rate-driven cost increases push sales prices higher, insufficient demand keeps these increases limited. This creates a dual pressure that negatively affects both profitability and price stability.

The contraction in industrial production is not temporary; it reflects structural and multidimensional problems. As investment appetite weakens, manufacturers now face difficulties in accessing financing even to sustain production. Rising interest rates, collateral requirements and tight credit policies directly impact production.

Particularly in sectors dependent on imported raw materials such as plastics, volatility in exchange rates and commodity prices creates greater risks. Weakening domestic demand, combined with declining consumer confidence, makes it difficult for manufacturers to sell what they produce. In foreign markets, sluggish conditions, protectionism and high logistics costs pressure exporters.

"Decisive policies are needed"
For our industry to navigate this bottleneck, decisive policies are needed to stimulate domestic demand, support exports and encourage production. Easing access to financing, reviving investment incentives and especially supporting high value-added production can no longer be postponed.
Turkey's industrial strength rests on the resilience of our enterprises that continue to produce even during crisis periods. However, the sustainability of this resilience depends on strengthening structural support and establishing closer dialogue with the real sector.