The export climate for Turkish manufacturers remained strong in February, official data showed Tuesday, driven by improved demand conditions as the omicron variant wave eased across a number of the country’s top export markets.
But Russia’s invasion of Ukraine, both among Turkey's important partners, clouds the outlook, posing a renewed threat with the impact on international demand still to be seen.
Turkey’s Manufacturing Export Climate Index rose to 55.2 in February from 52.3 in January, according to a survey from the Istanbul Chamber of Industry (ISO) and London-based global data firm IHS Markit.
The reading signaled a marked improvement in the demand climate for Turkish manufacturing exporters, and one that was the strongest since last August.
The main factor behind the more marked improvement in demand conditions in February "was the passing of the omicron wave in a number of key export markets," the panel said.
"In fact, each of the top six export destinations for Turkish manufactured products saw output trends improve midway through the first quarter amid reduced COVID-19 disruption" it added.
The index is calculated by weighting together national Purchasing Managers’ Index (PMI) data on output trends from PMI surveys. Weights are derived from statistics on the relative importance of individual trading partners’ contributions to the exports of Turkish manufacturers.
Germany continued to see activity recover following the decline recorded at the end of last year, with output up markedly in February.
Elsewhere in the eurozone, France and Italy saw growth pick up from January, while Spain signaled a strong rebound in output following a decline at the start of the year.
After the rate of expansion in activity in the United States had softened to a one-and-a-half-year low in January, growth picked up in February.
The United Kingdom posted a strong acceleration in the rate of increase last month, with output rising at the sharpest pace in eight months.
The main export market for Turkish manufacturers in the Middle East, the United Arab Emirates (UAE), also saw growth improve, with non-oil activity now having risen sharply for a sustained period.
Meanwhile, Qatar posted the strongest increase in output of all the countries covered by the report. Less positive were continued reductions in activity in Egypt and Lebanon.
Although the omicron wave subsided in a number of key export destinations, other parts of the world experienced disruption as a result of the spread of the virus, primarily in Asia.
Hong Kong was particularly affected, posting a sharp reduction in activity that was the most marked of all those covered. Meanwhile, output in China was broadly unchanged for the second month running and Japan posted the fastest decline in activity since August last year
Elaborating on the reading, Andrew Harker, economics director at IHS Markit, said the lessening impact of the omicron wave, particularly in key export markets, gave Turkish manufacturing exporters a boost in February.
"Hopes are growing that the era of disruption caused by the pandemic is coming to an end. However, the conflict in Ukraine poses a renewed threat to business, with the impact on international demand still to be seen," Harker outlined.
