According to the consolidated data of the machinery manufacturing industry shared by the Machinery Exporters Association (MAIB), Turkey’s total machinery exports, including free zones, at the end of the first 11 months of the year was 25.8 billion dollars. Kutlu Karavelioğlu, President of the Machinery Exporters Association, stated that developed countries struggled not to lose their market shares in a year when global investment appetite and machinery orders decreased. “Even Germany, one of the locomotive countries of Europe, could not catch up with the 2022 results. “We will work December as an extra month compared to last year and we will close the 100th anniversary of our Republic with a new record as one of the few countries in the world that can increase its exports,” he said.
According to the consolidated data of the machinery manufacturing industry, in the January-November period, Turkey’s total machinery exports, including free zones, increased by 8.5 percent compared to the same period of the previous year, reaching 25.8 billion dollars. While the branches whose exports increased rapidly in the 11-month period included rolling and casting machinery with 20.6 percent, machine tools and pumps-compressors with 16 percent, and packaging machinery with 17.6 percent, the only sub-sector whose exports decreased was textile and apparel with 9 percent. They had machines. The sector achieved an increase in value in all major foreign trade markets; Total sales to the top 7 markets, consisting of Germany, Russia, USA, Italy, UK, France and Spain, increased by 17 percent and exceeded 10 billion dollars.
Kutlu Karavelioğlu, President of the Machinery Exporters’ Association, evaluated the decline in industrial PMI data below 50 points in November in the USA, China and the Eurozone, where economic activities slowed down in the high interest rate environment, and commented on the developments in the global industry as follows:
“The world’s most powerful machinery manufacturing countries, which shape technology and the global economy, have determined reaching last year’s export figures as a sufficient success target in such an environment. It would have been enough for them not to lose their share in the market in a year when investment appetite and machinery orders decreased, but even Germany, one of the locomotive countries of Europe, could not achieve this target. We, on the other hand, compressed our exports for the whole of 2022 into 11 months, and increased our sales by 8.8 percent to over 3 billion dollars, even to Germany, whose machinery and equipment investments have decreased.
“We will work December as an extra month and we will close the 100th anniversary of our Republic with a new record as one of the few countries in the world that can increase its exports.” Evaluating the fact that the sector experienced a monthly contraction for the first time in a long time in November, when the global recession was intensely felt, Karavelioğlu said, “It is natural that the 7.2 billion dollar exports, which we achieved with an extraordinary increase of 21 percent in the last quarter of last year, will create a base effect. The decline in the amount of machinery we shipped, partly due to the increase in our unit prices, makes us think that our exports remained flat at 2.4 billion dollars last month. In the 11-month period, when our KG prices increased from 6.2 dollars to 7.2 dollars on average, we had an export loss of 250 thousand tons compared to last year. “The impact of the difference between inflation and exchange rate on our competitiveness is noticeable in all our export branches,” he said.
“Our machinery exports to Europe, whose imports are decreasing, are increasing”
Stating that the backlog of orders in the hands of manufacturing enterprises has started to decrease in Europe, where commercial vitality has decreased and the growth trend has weakened, Karavelioğlu commented on the developments in the continent, where more than 60 percent of Turkey’s machinery exports take place, as follows: “According to World Trade Organization estimates, imports are 0 percent this year, There is not a loss but an increase in our machinery exports to Europe, which has shrunk by more than 7%. As we come to the end of interest rate hikes in the region, our optimism about the timing of recovery increases, considering that energy and industrial material costs have started to decrease in the world, which will alleviate inflationary pressure. The data we have shows that economic revival will begin in mid-2024 at the latest and Europe’s total imports will increase by nearly 2 percent by the end of next year. Right now, like everyone else in the world, we have to walk a fine line in the face of financial difficulties, but there is a light at the end of the tunnel.”
“Türkiye is the most attractive machinery market”
Karavelioğlu pointed out that the sector should continue its investments in order for Turkey to get its share from the new wave of orders expected to start from the second quarter of 2024 and said:
“In an environment where finance is expensive, it is clear that the sectors that represent Turkey’s technological competitiveness cannot be left to their own devices. We have to continue our investments in order to quickly adapt to green industry regulations and digitalize in line with sustainability targets. Our relevant Ministries have intense efforts and extensive interaction with sectoral organizations on this issue. We can see from our machinery production, which grew by 13.4 percent in the same period, that machinery and equipment investments, which grew by 23.7 percent in the third quarter despite the global contraction, allowed us to compensate for our quantitative losses in exports. “This situation, which whets the appetite of our competitors and importers, also indicates that we need to be more meticulous in protecting our domestic market from unqualified goods and unfair competition.”
“We must be vigilant about the aggressive trade policies of China and India.”
Stating that the investment decisions postponed in the first half of the year were effective in the increase in machinery and equipment investments in Turkey in the third quarter, Karavelioğlu concluded his words by pointing out that although this growth reflected in the machinery industry production was positive, the increase in investment goods imports was very high:
“It will not be possible to recover the foreign exchange spent at the same pace in the first 10 months, when imports of investment goods increased by over 30 percent to 48 billion dollars. Since customers’ price sensitivity is higher in periods when global PMI data decline, exporting will become more difficult in this environment where the depreciation of TL has stabilized. We must be especially vigilant about the aggressive trade policies of China and India. There were 9 countries where our machinery imports exceeded 1 billion dollars annually, and this number will soon reach 10, including India. China, which sold around 12 billion dollars of machinery to Turkey this year, has been making major investments in India recently. These two countries are trying to get a share from us both abroad and domestically. “We must protect our domestic industry against such attacks.”
