The export climate for Turkish manufacturers remained robust in March, official data showed Friday, propelled by improved demand as the coronavirus pandemic eased across a number of the top export markets.
But Russia’s invasion of Ukraine clouds the outlook and has already impacted output in several important markets, according to a survey from the Istanbul Chamber of Industry (ISO) and London-based global data firm IHS Markit.
The panel said that Turkey’s Manufacturing Export Climate Index came in at 53.9 in March from 55.2 in February.
Despite it indicating a more limited recovery, the reading remained above the threshold level of 50 that separates growth from contraction and marked the 14th consecutive month of improvement in the export demand.
The panel said production increase accelerated in some main export markets as disruptions caused by the pandemic relatively eased in March.
Growth rates rose to an eight-month high in the United States and a nine-month high in the United Kingdom, and production growth accelerated in France, it noted.
As a result of the initial effects of the war in Ukraine, however, there was a loss of momentum in the output growth of Germany, Italy, Spain and the Netherlands.
The survey indicated that in Russia, where production fell sharply, the three-month growth period ended. The non-oil economic activity growth rate in the United Arab Emirates (UAE) maintained its strong level, it added, while the most pronounced deceleration occurred in Hong Kong.
Despite the increase in the first quarter, effects of the conflict in Ukraine, such as price increases and supply chain disruptions, pose a threat that could limit export opportunities in the coming months, said Andrew Harker, economics director at S&P Global Market Intelligence.
"Although export demand conditions remained resilient at the end of the first quarter, the large-scale effects of the war in Ukraine, such as loss of business confidence, price increases and supply chain disruptions, have the potential to limit manufacturers’ export opportunities in the second quarter of the year," Harker said.