Significant deterioration of the export climate

Although the most significant deterioration in the export climate has been recorded since the beginning of 2023, the main source of weakness remained Europe.

Turkey’s manufacturing sector export climate index from the Istanbul Chamber of Industry (ISO) remained below the threshold value of 50, falling to 48.5 in October 2023, falling for the sixth consecutive time.

The rate in question was 49 in September.

All values ​​measured above 50 in the index indicate an improvement in the export climate, while values ​​below 50 indicate a deterioration.

THE FALL OF THE EUROPEAN MARKETS WAS EFFECTIVE

According to ISO data, the index decreased from 49 in September to 48.5, while exporters continued to face a difficult demand environment at the beginning of the last quarter of the year.

The weakness was again largely due to the ongoing slowdown in Europe’s main export markets.

In Europe, where seven of the ten largest markets for Turkish manufacturing exports are located, a contraction was recorded in October in all markets except Spain.

Assessing the index, S&P Global Market Intelligence Economic Director Andrew Harker said: “Exporters in the Turkish manufacturing industry continued to be affected by the difficult situation of the European economy in October. “The decline in economic activity in many major export markets has led to a deterioration in the overall climate,” he said.

GROWTH COULD NOT PREVENT DECLINE

Most of the markets that positively affected demand were again located in the Middle East.

The United Arab Emirates, where growth reached the highest pace in the past four months, became the fastest-growing market within the scope of the survey panel.

In Russia, another major export market, production continued to rise strongly in October. Thus, economic activity has grown in the last nine months.

Other markets that showed strong performance early in the fourth quarter were Asian countries. While growth in India maintained its high pace, Singapore, Indonesia and the Philippines also stood out with significant production increases.

Harker said: “In addition to signs of resilience in the US economy, the growth seen in some parts of Asia and the Middle East could not prevent the deterioration of the overall picture. “For this reason, manufacturers looking for new business may decide to focus on regions of the world where the economic situation is stronger,” he said.