Export climate continues to improve in August

ISTANBUL

The Istanbul Chamber of Industry (ISO) Turkey Manufacturing Export Climate Index eased to 52.4 in August from 53 in July but remained above the 50-mark.

Any index value above 50 indicates an improvement in the export climate.

“The latest reading pointed to an improvement in demand conditions in the main export market for the second month in a row,” according to a statement by the ISO.

The index plunged to 19.1 in April this year as the COVID-19 pandemic started to hit the global economy due to widespread lockdown and interruptions in international trade. It climbed to 47.5 in the following month.

“Despite the improvement in the general outlook in August, the decoupling in different export markets continued. Some countries remained in the contraction territory while the economic recovery in others lost steam. On the other hand, demand gained momentum in a number of countries,” the ISO noted.

The production activity in the U.S., which accounts for 5 percent of the Turkish manufacturing exports, hit a 17-month high, the chamber said, adding that this was promising.

There were signs that economic recovery in a number of eurozone nations slowed due to the increase in the number of COVID-19 cases, according to the ISO.

“Economic activity in Spain and Italy lost steam while production increase in France and Germany continued in August but at a slower pace compared with the previous month.”

Overall demand conditions for exports showed an improvement in the month, however, data suggested that the recovery is rather unpredictable, commented Andrew Harker, economics director at IHS Markit.

“The developments suggest that Turkish companies will have to struggle with the sharp changes in demand conditions in the export markets for some more time,” Harker said.

Turkey’s exports totaled $12.5 billion in August, down at 5.7 percent from the same month last year, according to the latest data from the Trade Ministry.

The country’s imports grew at 20.6 percent on an annual basis to $18.8 billion in the same period, according to the ministry’s preliminary data.

Commenting on figures Trade Minister Ruhsar Pekcan said the decrease in exports stemmed from weak external demand in the EU and disruption in the automotive sector last month due to the coronavirus pandemic.

“We believe that our foreign trade will gain strong momentum in the coming period, thanks to the measures we have taken, the effective policies we implemented and the normalization in our main export markets, especially in the EU,” Pekcan said.