December 2025 Istanbul Chamber of Industry Manufacturing PMI: A Data-Driven Analysis
The Istanbul Chamber of Industry Manufacturing PMI for Turkey rose to 48.00 in December 2025, surpassing expectations and marking a modest rebound from November’s 46.50. This report delves into the latest PMI release using the Sigmanomics database, comparing it with historical trends and assessing its broader macroeconomic implications. We explore the interplay of monetary policy, fiscal stance, external shocks, and market sentiment shaping Turkey’s manufacturing sector outlook.
Table of Contents
The Istanbul Chamber of Industry Manufacturing PMI edged up to 48.00 in December 2025, improving from 46.50 in November and beating the 46.00 consensus. Despite remaining below the 50 threshold that signals expansion, this uptick suggests a tentative easing of contraction pressures in Turkey’s manufacturing sector. The 12-month average PMI stands at 47.30, indicating persistent softness but with signs of stabilization.
Drivers this month
- Improved new orders contributed 0.80 points, reflecting modest demand recovery.
- Supplier delivery times shortened slightly, adding 0.30 points.
- Employment levels remained weak, subtracting -0.40 points from the headline PMI.
Policy pulse
The PMI remains below the neutral 50 mark, consistent with the central bank’s cautious stance amid inflation running above target. The 48.00 reading aligns with the CBRT’s recent signaling of a steady monetary policy to balance growth and price stability.
Market lens
Immediate reaction: The Turkish lira (TRY) appreciated 0.30% against the USD within the first hour post-release, while the BIST 100 index showed a mild 0.50% gain, reflecting improved sentiment on manufacturing prospects.
Turkey’s manufacturing PMI is a vital barometer of industrial health, closely linked to GDP growth, employment, and inflation trends. The December reading of 48.00, though still contracting, is the highest since March 2025’s 48.30, signaling a potential bottoming out after five consecutive months below 47.
Monetary policy & financial conditions
The Central Bank of the Republic of Turkey (CBRT) has maintained its policy rate at 25% amid inflation hovering near 35% YoY. Tight financial conditions have pressured manufacturing investment and credit availability. The PMI’s slight improvement may reflect easing credit stress and stabilizing input costs.
Fiscal policy & government budget
Turkey’s fiscal stance remains moderately expansionary, with government spending focused on infrastructure and social programs. However, elevated public debt and budget deficits constrain further stimulus. Manufacturing’s rebound could benefit from targeted fiscal support to boost domestic demand.
External shocks & geopolitical risks
Global supply chain disruptions have eased somewhat, but geopolitical tensions in the region and volatile commodity prices continue to weigh on manufacturing input costs and export demand. The PMI’s improvement suggests partial adaptation to these external headwinds.
Market lens
Immediate reaction: The BIST 100 index rallied 0.50% post-release, while the TRY/USD exchange rate strengthened by 0.30%, signaling investor optimism about easing industrial contraction.
This chart highlights a stabilization trend in Turkey’s manufacturing PMI after months of contraction. The upward movement suggests that supply chain normalization and modest demand recovery are supporting industrial activity. However, the PMI remains below 50, indicating that full expansion is not yet underway.
Looking ahead, Turkey’s manufacturing PMI trajectory will hinge on several factors. The base case scenario (60% probability) envisions a gradual rise toward 50 by mid-2026, driven by easing inflation, stable monetary policy, and improved export demand. A bullish scenario (20%) sees PMI surpassing 50 by Q2 2026, fueled by stronger global growth and fiscal stimulus. Conversely, a bearish scenario (20%) projects PMI remaining below 47 if inflation spikes or geopolitical risks intensify.
Structural & long-run trends
Turkey’s manufacturing sector faces structural challenges including energy costs, labor productivity, and technology adoption. Long-term growth depends on reforms to enhance competitiveness and diversify export markets. The recent PMI improvement may signal early benefits from such efforts.
Financial markets & sentiment
Investor sentiment remains cautiously optimistic. The TRY’s modest appreciation and BIST 100 gains post-PMI release reflect confidence in a manufacturing recovery, but volatility persists amid global uncertainties and domestic policy risks.
The December 2025 Istanbul Chamber of Industry Manufacturing PMI reading of 48.00 offers a cautiously positive signal for Turkey’s industrial sector. While contraction persists, the upward trend from recent months suggests stabilization amid challenging macroeconomic conditions. Policymakers should monitor inflation and geopolitical risks closely, balancing monetary discipline with targeted fiscal support to sustain recovery momentum. Market participants will watch upcoming PMI releases as a key gauge of Turkey’s growth trajectory.
Key Markets Likely to React to Istanbul Chamber of Industry Manufacturing PMI
The Istanbul Chamber of Industry Manufacturing PMI is a leading indicator for Turkey’s economic health, influencing equity, currency, and commodity markets. Investors track this data closely to gauge industrial momentum and adjust risk exposure accordingly.
- BIST100: Turkey’s benchmark stock index, highly sensitive to manufacturing sector performance.
- USDTRY: The USD/TRY currency pair reacts to shifts in economic outlook and monetary policy expectations.
- EURTRY: Reflects Turkey’s trade ties with Europe and investor sentiment toward the lira.
- ASELS: A major Turkish defense stock, often influenced by broader industrial trends.
- BTCUSD: Bitcoin’s price can reflect risk appetite shifts linked to emerging market data releases.
Insight: Istanbul Manufacturing PMI vs. BIST 100 Since 2020
Since 2020, the Istanbul Manufacturing PMI and BIST 100 index have shown a positive correlation, with PMI contractions often preceding equity sell-offs. For example, during the 2023 inflation surge, PMI dipped below 45, coinciding with a 15% BIST 100 decline. The recent PMI rebound to 48.00 aligns with a 5% rally in the BIST 100 over the past month, underscoring PMI’s role as a forward-looking economic barometer.
FAQs
- What is the Istanbul Chamber of Industry Manufacturing PMI?
- The Istanbul Chamber of Industry Manufacturing PMI measures the health of Turkey’s manufacturing sector based on surveys of purchasing managers.
- How does the PMI affect Turkey’s economy?
- The PMI signals industrial growth or contraction, influencing GDP forecasts, employment, and monetary policy decisions.
- Why is the PMI below 50 significant?
- A PMI below 50 indicates contraction in manufacturing activity, signaling economic slowdown risks.
Final Takeaway
The December PMI rise to 48.00 signals tentative stabilization in Turkey’s manufacturing sector, offering cautious optimism amid persistent macro challenges.
Sources
- Istanbul Chamber of Industry Manufacturing PMI, December 2025, Sigmanomics database.
- Central Bank of the Republic of Turkey Monetary Policy Reports, 2025.
- Turkish Statistical Institute (TurkStat) Economic Indicators, 2025.
- Sigmanomics.com Market Data and Analysis, 2025.
BIST100: Turkey’s benchmark stock index, closely tied to manufacturing sector health.
USDTRY: Currency pair reflecting Turkey’s economic and monetary policy shifts.
EURTRY: Tracks Turkey’s trade relations with Europe and investor sentiment.
ASELS: Major Turkish industrial stock influenced by manufacturing trends.
BTCUSD: Bitcoin price reflecting global risk appetite linked to emerging market data.
The December 2025 PMI of 48.00 marks a 1.50-point increase from November’s 46.50 and surpasses the 12-month average of 47.30. This uptick reverses a two-month decline from September’s 47.30 and October’s 46.70, indicating a tentative recovery phase.
New orders rose to 49.20 from 47.50 last month, while supplier delivery times shortened, reflecting improved supply chain conditions. Employment remained subdued at 45.80, consistent with ongoing labor market challenges in manufacturing.