ICI Türkiye Manufacturing Export Climate Index Rose to 49.5 in January

• 08.02.2023
• News

The Istanbul Chamber of Industry (ICI) Türkiye Manufacturing Export Climate Index, which measures the operation conditions in the key export markets of the Turkish manufacturing sector, increased to 49.5 in January. It signalled a sixth successive monthly moderation, and the latest slowdown was only marginal and the least pronounced over this sequence. The softer moderation in the export climate reflected signs of recovery in a range of key export markets.

Germany saw a near-stabilisation of business activity, a marked turnaround from the sharp declines seen towards the end of 2022. Contraction in France slowed down. The UK was the only European market to post a faster reduction in output. There was an easing in the downturn in the US. The main source of demand improvements for Turkish manufacturing exporters remained the Middle East. The contraction in Russia decreased compared to the previous month.

The Istanbul Chamber of Industry (ICI) Türkiye Manufacturing Export Climate Index, which measures the operation conditions in the key export markets of the Turkish manufacturing sector, announced the results of the index for January 2023. In the index, the figures above the 50.0 no-change mark signals an improvement in the export climate, while the figures below signals a deterioration.

The Istanbul Chamber of Industry Türkiye Manufacturing Export Climate Index rose to 49.5 in January from 48.5 in December. Although this reading signalled a sixth successive monthly moderation in the export demand climate for Turkish manufacturers, the latest slowdown was only marginal and the least pronounced over this sequence. The softer moderation in the export climate reflected signs of recovery in a range of key export markets.

Germany saw a near-stabilisation of business activity, and the UK was the only market to post a faster reduction in output

In Europe, Germany saw a near-stabilisation of business activity, a marked turnaround from the sharp declines seen towards the end of 2022. A softer reduction was also signalled in France, while outright increases in activity were recorded in Italy, Spain and the Netherlands. The UK was the only European market to post a faster reduction in output at the start of the year. There was also an easing in the downturn in the US in January. Although the business activity continued to fall at a solid pace in the world’s largest economy, the rate of reduction softened to the weakest for three months.

The Middle East remained the main source of growth

While there were tentative signs of recovery in Europe and the US, the main source of demand improvements for Turkish manufacturing exporters remained the Middle East. The UAE posted a sharp increase in non-oil activity, with the rate of expansion unchanged from December, while growth in Saudi Arabia quickened at the start of the year. On the other hand, there were some signs of weakness, however, as Egypt, Lebanon and Qatar saw activity moderate. Russia, which accounts for around 3% of Turkish manufacturing exports, saw business activity decrease for the third time in the past four months. That said, the pace of reduction eased and the manufacturing sector posted an expansion in production. Of the remaining three BRIC economies, India and China saw output increase. Increase in China’s output reflected a boost from the loosening of COVID-19 restrictions, while Brazil saw broadly no change in output over the month. 

Commenting on the Istanbul Chamber of Industry Türkiye Manufacturing Export Climate Index, Andrew Harker, Economics Director, S&P Global Market Intelligence, said: 

 “2023 started with promising developments for the Turkish manufacturing exporters. Since the moderation in the US and Europe was not as significant as worried before, the signs of demand improving provide hope that expansions can be recorded in the coming month. Also the eased restrictions in China might get the international demand stronger in the coming months.

You can find attached the Istanbul Chamber of Industry Türkiye Export Climate Index January 2023 reports.