The Istanbul Chamber of Industry (ISO) Turkey Manufacturing Sector Export Climate Index, which measures operating conditions in the main export markets of the Turkish manufacturing sector, rose to 53.0 in July, exceeding the threshold value of 50.0 for the first time in the last five months. The index indicated an improvement in demand conditions for Turkish manufacturing exporters.
According to the report released today by the ISO, production increased in most of the top 10 export markets of the Turkish manufacturing sector. The normalization of operating conditions due to the easing of curfews allowed Germany, the United Kingdom, and Italy, which account for more than one-fifth of Turkish manufacturing exports, to return to the growth zone in July. Economic activity also grew in the United States, while China maintained its strong growth pace. In Russia, economic activity showed a strong increase.
According to seasonally adjusted data, the Istanbul Chamber of Industry Turkey Manufacturing Sector Export Climate Index, which was measured at 47.5 in June, reached 53.0 in July, exceeding the threshold value of 50.0 for the first time in the last five months. This data indicated an improvement in demand conditions for Turkish manufacturing exporters.
A complex picture was noted in the Middle East. While demand conditions improved in the United Arab Emirates, Egypt, and Qatar, economic activity decreased in Saudi Arabia and Lebanon. While economic activity continued to decline in Mexico and Brazil, it increased in Colombia. China recorded its third consecutive month of expansion and maintained its strong growth pace. Among other BRIC countries, economic activity showed a strong increase in Russia, while India remained significantly in the contraction zone.
Andrew Harker, Economics Director at IHS Markit, made the following assessment of the Istanbul Chamber of Industry Turkey Export Climate Index:
"Following the Covid-19-related contractions, key export markets for Turkish manufacturers continued to recover in July. This strengthened hopes that the reopening of foreign markets would support the improvement in demand in the manufacturing sector. On the other hand, data showing increasing virus cases in some parts of the world indicates the fragility of existing recoveries, while new restrictions that could be activated at any moment have the potential to derail economies from the recovery path."