ISTANBUL: Turkish factory activity grew at a slower pace in February as new orders contracted slightly, a survey showed on Monday, although manufacturers continued to expand production and add staff.

The headline index reading fell to 51.7 in February from 54.4 a month earlier, data from the Istanbul Chamber of Industry and IHS Markit showed, staying above the 50 mark that separates expansion from contraction.

Signs of improvements in demand led manufacturers to expand production despite a slowdown in new business and issues with the supply of raw materials.

Higher output and planned new production lines led firms to take on more staff, the panel said, extending the current sequence of job creation to nine months.

Input costs and output prices continued to rise but at a slower pace mainly due to higher raw material costs, with a strengthening of the lira helping lead to softer inflationary pressures.

“Although there were signs of softening new order inflows in February, the overall Turkey PMI remained in positive territory as firms shrugged off a pause in new order growth and continued to raise production and employment,” said Andrew Harker, economics director at IHS Markit.

“There was also good news on the inflation front. Although supply issues are causing higher raw material prices globally, an appreciation of the Turkish lira has helped to mitigate these pressures,” Harker also said.