Turkey Export Climate Index Rises to 53.2

Turkey's Export Climate Index Reaches 53.2 Results from the May 2022 period of the Istanbul Chamber of Industry (İSO) Turkey Manufacturing Sector Export Climate Index, which measures operating conditions in the main export markets of Turkey's manufacturing sector, have been announced. In the index, all figures measured above the threshold value of 50 point to improvement in export climate, while values below 50 indicate deterioration. The Istanbul Chamber of Industry Turkey Manufacturing Sector Export Climate Index was recorded at 53.2 in May, indicating that the improving trend in demand conditions in export markets has reached 16 months. However, the index declined from the April level of 54.4, with improvement momentum reaching its lowest level since January.

Growth Slowed in Four Largest Markets

A slowdown in growth in Germany, the United Kingdom, the United States and Italy—Turkey's four largest export markets—drew attention. In May, growth in the United Kingdom in particular slowed sharply, reaching the slowest pace in the past 15 months. Growth in the United States also lost significant momentum compared to the previous month. By contrast, sustained strong growth in economic activity in Spain and France ranked among positive developments in the survey. This improvement was driven especially by post-Covid recovery in service sector demand.

Middle East Supported Export Climate; Most Pronounced Slowdown Occurred in China

In May, the Middle East region supported export climate significantly. Non-oil economic activity in the United Arab Emirates recorded sharp growth, with this increase occurring at the highest rate since the beginning of the year. The strongest growth among countries monitored in the survey was recorded in Qatar. By contrast, production trends in Egypt and Lebanon remained weak. The war in Ukraine continued to affect economic activity in some regions of Europe. Production in Russia contracted for a third consecutive month, though this contraction occurred at the mildest level of the period in question. Poland's manufacturing production recorded the sharpest decline in the past two years. The most pronounced slowdown in production was recorded in China, where Covid-19 restrictions continued to limit company operations. Contraction in production, which has continued for three months, occurred at a sharp pace in May. The problems in China were observed to affect other regional economies as well. Economic activity declined in Taiwan, South Korea and Malaysia.