The July data indicated that demand conditions for Turkish manufacturing industry exporters were approaching stagnation. This development was a result of balancing production losses in some significant markets in Europe with robust demand conditions in other regions like the Middle East and India.
In June, the Istanbul Chamber of Industry Turkey Manufacturing Sector Export Climate Index was 51.1. However, in July, it decreased for the third consecutive month to 50.3. This figure suggests that the strengthening of international demand conditions was very slight. The improvement observed was at its most limited level during the past six months of continued positive momentum.
Economic activity experienced rapid increases in the United Arab Emirates, Qatar, and Saudi Arabia. Among all economies covered in the survey, the most significant growth was measured in Saudi Arabia. Looking at other countries, Lebanon saw production increase for the second consecutive month, while the decline in production slowed down in Egypt. India continued its strong performance with faster growth in July compared to the previous month, while growth continued, albeit at a slower pace, in Russia and China. In Brazil, however, production contracted for the first time in five months.
S&P Global Market Intelligence’s Director of Economics, Andrew Harker, stated in the announcement that the deteriorating economic outlook, particularly in the manufacturing sector in Europe, suggests that the improving trend for Turkish manufacturing industry exporters may have come to an end. Firms are hopeful that the vibrant demand conditions in the Middle East will continue to drive growth for now. However, in order to prevent a period of worsening external demand conditions, global growth needs to become more widespread.