Improvement in Turkish export climate is faltering, survey shows

An improvement in the export climate for Turkish companies weakened in November, according to a survey by the Istanbul Chamber of Industry (ISO) and IHS Markit.

The Turkey Manufacturing Export Climate Index fell to 50.1 last month from 50.3 in November, extending the lowest levels since 2013, according to the survey published on Tuesday. Any reading above 50.0 indicates an improvement in the health of the export climate, while any reading below 50.0 signals deterioration.

“Weakness in some of Turkish manufacturers’ key export destinations hampered growth in November. In fact, each of the three largest export markets - Germany, the UK and Italy - saw business activity decrease during the month,” said Andrew Harker, an associate director at IHS Markit.

Turkey is looking to exports to lift the country out of a deep economic downturn sparked by a currency crisis last year and to meet an economic growth goal of 5 percent for 2020. But a global slowdown, exacerbated by a trade war between the United States and China, is hurting demand for Turkish products.

The index reached the highest level this year in February, when the reading was 52.4.

Still, weakness in some key export markets is being cancelled out by signs of growth picking up in the United States and other major economies, ISO and IHS Markit said in the report.

“This could help breathe life into the global economy and improve demand conditions elsewhere,” Harker said.

Turkish exports contracted by an annual 1.1 percent to $16.2 billion in November, the Trade Ministry said on Dec. 2. They decreased by an annual 0.1 percent to $15.7 billion in October.

The government is also relying on exports to prevent a resurgence of Turkey’s historically wide current account deficit, which reached 6.5 percent of gross domestic product in the summer of 2018. A recent slump in demand for imports means the current account is now in surplus. But imports climbed an annual 11.4 percent to $18.2 billion in November, indicating the positive trend in the current account may be coming to an end.