The Istanbul Chamber of Industry (ISO) Turkey Manufacturing Export Climate Index, which measures the contributions of the country’s manufacturing industry to primary export markets, dropped from 53.9 points to 52.3 points in January as compared to December 2021. Thus, the index has fallen to the lowest level since February 2021, though it posted its 12th successive monthly improvement.
The key factor behind the slowdown in the rate of improvement was a marked softening of growth in the U.S at the start of the year. The outbreak of the Omicron variant contributed to the rate of expansion easing to a marginal pace, the slowest in a year and a half.
In Germany, there were some signs of improvement following a marginal reduction in output in December. January data pointed to a solid increase in activity. Elsewhere in the Eurozone, the Omicron variant impacted operations. Slighter improvements in output were seen in France and Italy, while Spain posted an outright decline in the activity for the first time in close to a year.
In the UK, output growth was solid, having quickened from the previous month amid signs that the Omicron wave was subsiding.
The strongest rates of growth in January were found in the Middle East, with both Qatar and the UAE registering steep increases in activity.
Russia posted a marginal increase in activity for the second month running in January. The steepest downturn in activity at the start of the year in Central Asia was recorded in Kazakhstan, where operations were hampered by the imposition of a state of emergency.
“The spread of the Omicron variant continued to hamper demand in key export markets for Turkish manufacturers in January, most notably in the U.S. That said, some countries have already seen the latest wave of the pandemic subside, raising hopes that any slowdown will prove short-lived, and that demand growth will start to speed up as 2022 progresses,” said Andrew Harker, Economics Director, IHS Markit.