Turkish export climate index rose to 49.5 percent

Turkish export climate index rose to 49.5 percent, Istanbul Chamber of Industry reported.

Demand conditions in export markets neared stabilisation at the start of 2023 amid signs that slowdowns in key export markets were moderating. Once again, the Middle East remained the main source of growth. The Türkiye Manufacturing Export Climate Index is calculated by weighting together national PMI data on output trends from PMI surveys. Weights are derived from statistics on the relative importance of individual trading partners’ contributions to the exports of Turkish manufacturers.

The Istanbul Chamber of Industry Türkiye Manufacturing Export Climate Index rose to 49.5 in January from 48.5 in December. Although the latest reading signalled a sixth successive monthly moderation in the export demand climate for Turkish manufacturers, the latest slowdown was only marginal and the least pronounced over this sequence. The softer moderation in the export climate reflected signs of recovery in a range of key export markets. In Europe, Germany saw a near-stabilisation of business activity, a marked turnaround from the sharp declines seen towards the end of 2022. A softer reduction was also signalled in France, while outright increases in activity were recorded in Italy, Spain and the Netherlands. The UK was the only European market to post a faster reduction in output at the start of the year. An easing in the downturn in the US was also registered in January. Although business activity continued to fall at a solid pace in the world’s largest economy, the rate of reduction softened to the weakest for three months.

While there were tentative signs of recovery in Europe and the US, the main source of demand improvements for Turkish manufacturing exporters remained the Middle East. The UAE posted a sharp increase in non-oil activity, with the rate of expansion unchanged from December, while growth in Saudi Arabia quickened at the start of the year. There were some signs of weakness, however, as Egypt, Lebanon and Qatar saw activity moderate. Russia, which accounts for around 3% of Turkish manufacturing exports, saw business activity decrease for the third time in the past four months.

That said, the pace of reduction eased and the manufacturing sector posted an expansion in production. Of the remaining three BRIC economies, India and Mainland China saw output increase, the latter reflecting a boost from the loosening of COVID-19 restrictions, while Brazil saw broadly no change in output over the month.