Export climate index drops in July

ISTANBUL

The Türkiye manufacturing export climate index posted 50 in July, data from the Istanbul Chamber of Industry (İSO) has shown.

The reading was down from 51.8 in June, thereby ending a period of improvement in the export climate stretching back to February 2021, the chamber said.

“While some key export markets saw activity continue to rise, most notably in the United Arab Emirates (UAE), others saw demand soften amid the impact of inflationary pressures.”

The main source of rising demand among the key export destinations for Turkish manufacturers was the UAE, where non-oil business activity continued to increase sharply, it said, noting that the latest rise was the joint-fastest in seven months.

There was a mixed picture for output at the start of the third quarter in Europe, the chamber stressed. Growth was maintained in the U.K., Spain, France and the Netherlands, albeit with rates of expansion slowing in each case.

Activity in Germany decreased for the first time in the year-to-date, and to the greatest extent since the first wave of the COVID-19 pandemic.

Germany is the single largest destination for Turkish manufacturing exports, accounting for around 9 percent of the total.

“The global economy continued to feel the strain that inflationary pressures are putting on demand in July, with some key export destinations now having moved into contraction,” commented Andrew Harker, economics director at S&P Global Market Intelligence.

“Europe and the U.S. are particular sources of weakness, with the Middle East currently likely to provide the main avenue of new work for Turkish manufacturers as activity continues to rise strongly,” he said.