In October 2023, Istanbul Chamber of Industry Türkiye Manufacturing Sector Export Climate Index registered at 48.5, indicating a significant deterioration in external demand conditions

November 10, 2023

ISO Türkiye Export Climate Index was 48.5 in October

Istanbul Chamber of Industry (ISO) Türkiye Manufacturing Sector Export Climate Index remained below the threshold value of 50.0 and realized as 48.5 in October 2023. The said rate was 49.0 in September. The most significant deterioration in the export climate since early 2023 was recorded, with Europe continuing to be the main source of weakness.

In Europe, where seven of the ten largest markets for Turkish manufacturing exports are located, all but Spain recorded contractions in October. Production in Spain remained unchanged. Growth was seen in the US, the Middle East and some parts of Asia. While growth in India maintained its high pace, Singapore, Indonesia and the Philippines stood out with notable production increases.

The results of the Istanbul Chamber of Industry (ISO) Türkiye Manufacturing Sector Export Climate Index for October 2023, which measures the operating conditions of the Turkish manufacturing sector in its main export markets, were announced. All figures measured above the threshold value of 50.0 in the index indicate an improvement in the export climate, while values below 50 indicate deterioration.

Istanbul Chamber of Industry Türkiye Manufacturing Sector Export Climate Index was below the threshold value of 50.0 for the third consecutive month in October. The index, which was 49.0 in September, dropped to 48.5, indicating the most significant deterioration in external demand conditions since the beginning of the year.

CONTRACTION IN EUROPEAN MARKETS
Turkish manufacturing exporters continued to face a challenging demand environment at the start of the fourth quarter. As in recent months, the weakness was again largely driven by the ongoing slowdown in the main export markets in Europe. The US remained on an expansionary path, while some Asian countries and the Middle East were the other regions where the growth trend was concentrated. In Europe, where seven of the ten largest markets for Turkish manufacturing exports are located, all but one of these markets contracted in October. The only exception was Spain, where production remained unchanged. In the United Kingdom, economic activity declined for the third consecutive month, while the contraction trend in Germany reached four months. In Italy and France, output has declined for the last five months. The US, the second largest export market for Turkish manufacturing products, continued to expand in October. Although the expansion was moderate, it was the fastest pace in the last three months.

STRONG GROWTH IN ASIAN COUNTRIES
Most of the markets that positively impacted demand were again located in the Middle East. The United Arab Emirates, where growth reached its fastest pace in four months, was the fastest expanding market in the survey panel. In Russia, another major export market, output continued to expand strongly in October. Thus, economic activity has expanded for the last nine months. Other markets with strong performances at the beginning of the fourth quarter were Asian countries. Growth in India maintained its high pace, while Singapore, Indonesia and the Philippines also stood out with notable output gains.

Commenting on the Istanbul Chamber of Industry Türkiye Export Climate Index, Andrew Harker, Economics Director at S&P Global Market Intelligence, said: “Turkish manufacturing exporters continued to be affected by the difficult economic situation in Europe in October. The general climate deteriorated as economic activity declined in many key export markets. Signs of resilience in the US economy, as well as growth in parts of Asia and the Middle East, did not prevent the overall picture from deteriorating. Therefore, manufacturers looking for new trade may decide to focus on regions of the world where the economic situation is stronger.”

Source: Istanbul Chamber of Industry (ISO)
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