ISO Turkey Export Climate Index December Results Announced

Easing of restrictions in some European regions following November limitations boosted demand conditions in export markets.

The Istanbul Chamber of Industry (İSO) Turkey Manufacturing Sector Export Climate Index rose above the threshold in December, reaching 50.5. The İSO Turkey Manufacturing Sector Export Climate Index, measured at 48.9 in November, surpassed the threshold again in December, reaching 50.5 and signaling a moderate improvement in the export climate for Turkish manufacturers. Following the restrictions in November, the easing of pandemic-related limitations in some European regions contributed to strengthened demand conditions in export markets. Production growth in Germany accelerated slightly at year-end, while the United Kingdom's economic activity returned to the growth zone after a decline recorded in November. Looking at other European economies, a slowdown in contraction was observed in countries such as France, Italy and Spain. The Netherlands saw a sharp increase in manufacturing output, with growth accelerating compared to the previous month. Production in the United States, which accounts for approximately 5 percent of Turkish manufacturing's export market, continued to rise markedly in the final month of 2020. However, the growth rate that reached a 5.5-year record level in November was at its lowest in the last three months in December. Among other North American countries, Canada's manufacturing output increased at the highest rate in approximately two and a half years.

Improved performance in the Middle East positively influenced expectations

Improved performance in some Middle Eastern countries positively influenced the expectations of Turkish manufacturing exporters. Following the decline in November, economic activity increased in the United Arab Emirates, while growth in Saudi Arabia reached its highest level since November 2019. Among the economies for which the Purchasing Managers' Index is calculated, Saudi Arabia recorded the second-strongest production growth after Taiwan. Among other Middle Eastern countries, Qatar's economic activity increased, while Egypt and Lebanon recorded declines. In Asia, Taiwan's strong production growth was indicative of the positive performance recorded across much of the continent. Economic activity in China continued its upward trend into its eighth month and maintained strong momentum in December. Growth was also recorded in India, Indonesia, South Korea, Thailand and Vietnam. However, Japan's continued contraction drew attention.

"Vaccine developments offer hope"

IHS Markit Chief Economist Andrew Harker, whose evaluations of the data were included in the statement, reported that the data for the final month of 2020 pointed to an improving outlook for Turkish manufacturing exporters. Harker, explaining that the easing of restrictions implemented in November across much of Europe and continued strong demand growth in the United States were decisive in this improvement, stated that the near future still carries a high degree of uncertainty as the pandemic continues to spread widely. Harker said, "However, developments in the vaccine field offer hope that exporters could see more reliable demand improvements in the coming periods of 2021." Source