Istanbul Chamber of Industry Türkiye Export Climate Index Became 51.3 in July

• 15.08.2019
• News

As the leader indicator of activity conditions of manufacturing sector in the main export markets, ICI Türkiye Export Climate Index realized as 51.3 in July.

Demand conditions of exporters of Turkish manufacturing sector continued to improve in July, however, improvement remained in a moderate level due to the slowdown in global economic growth. While growth in Europe and North America maintained its moderate progress, Middle East continued to influence the general picture positively.

As the leader indicator of activity conditions of manufacturing sector in the main export markets, the results of ICI Export Climate Index were declared for the term July 2019. Any figure measured above the threshold of 50 indicates improvement in export climate while any figure below the threshold of 50 indicates disruption.

According to the data declared as cleaned from seasonal impacts, ICI Türkiye Export Climate Index, which was 51.5 in June realized as 51.3 in July. Despite the fact that the index indicates an improvement in export climate, this improvement realized limited compared to last months. Improvement rate slowed down in the fifth successive month due to the slowdown in global economic growth. The improvement rate of Europe, where 7 of 10 biggest export markets of Turkish manufacturers are located, continued to remain relatively low.

In Germany, the lowest growth was recorded since June 2013 due to the dramatic decline in export sector manufacturing. Growth in France, Spain and Netherlands also lost acceleration. A moderate improvement was observed in the demand requirements of both United Kingdom and Italy at the beginning of the first quarter; however, economic activity continued its weak growth pace. In United States, the growth rate of private sector activities observed in the highest level of the last three months in July. Despite this fact, manufacturing sector of the biggest economy of the world showed weakness and the lowest growth was recorded since June 2016. In Canada, as another North America country, manufacturing production indicated declined in the fourth successive month.

Middle East continued to paint a promising picture

Middle East, consisting 7% of export of Turkish manufacturing sector, continued to paint a relatively promising picture in terms of demand conditions. While economic activity recorded strong increases in both United Arab Emirates and Saudi Arabia, the first increase in the last three months was recorded in Egypt. On the other hand, challenging demand conditions continued in Lebanon and Qatar.

Moderate growth was recorded in BRIC countries in July. The growth in China recorded a slight improvement after the lowest rate of the last three years. In Brazil and Russia, manufacturing improved slightly after the declines in June. Economic activity in India is strong and grew in the highest level observed since November 2018.

Andrew Harker, Deputy Director of Markit, who evaluated ICI Türkiye Export Climate Index, said:

“Global economic slowdown observed especially in manufacturing sector makes getting new orders from abroad for Turkish exporters more difficult. However, some regions, primarily Middle East, where demand is strong, attracts attention. Despite the slowdown in some regions of Europe and North America in last months, it is seen that these economies do not face recession and moderate improvements in demand continues. Thus, weakness of currency may make Turkish manufacturing industry products more attractive for foreign purchasers.”