Amid a new round of COVID-19 restrictions in Europe, Turkey’s biggest export market, Export Climate Index (ECI) for the manufacturing sector, dropped to 48.9 in November, signaling a deterioration in demand conditions for exporters for the first time in five months.
The Istanbul Chamber of Industry (ISO) report, prepared in cooperation with London-based global data firm IHS Markit, showed that the index was down from 51.2 in October.
Any index above 50 points indicates an improvement in the country’s export climate while any below 50 means a deterioration.
Although the recovery in demand conditions continues in Germany which takes a 9% share in Turkey’s manufacturing sector exports, the deterioration in demand in other European markets surpassed the German side. Activity in Germany rose for the fifth month running, albeit at a very slow pace. Economic activity in Italy, France, Spain and Greece all recorded sharp declines, with rates of decline accelerating from those seen in the previous month amid the introduction of lockdown measures. The U.K. dipped into contraction territory midway through the final quarter, seeing a modest reduction in output which ended a four-month sequence of expansion.
Commenting on the report, Andrew Harker, economics director at IHS Markit, said there were divergent trends across the main export markets for Turkish manufacturers.
“The COVID-19 pandemic blighted demand conditions across much of Europe, with a second wave of the virus leading to renewed restrictions. On the other hand, the U.S. powered ahead, posting the fastest expansion of all countries covered by the report. Manufacturers will hope that the authorities in Europe can gain control of the virus quickly, enabling a swift reopening of economies to join the U.S. in growth territory,” he said.
In contrast to the picture in Europe, the U.S. saw a steep expansion of activity and one that was the sharpest since March 2015. Canada also posted a marked increase, with manufacturing production up at a similar pace to that seen in October.
The Middle East saw mixed fortunes in November. The largest export destination for manufacturers in the region – the United Arab Emirates (UAE) – posted a slight fall in activity, the first in six months. Lebanon also continued to face economic difficulties. On the other hand, growth in Saudi Arabia quickened to a 10-month high, while rises in output were also signaled in Egypt and Qatar. After the U.S., the strongest increase in output in the latest month was in Taiwan, where growth was the strongest since July 2014.