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, amounted to 2.1 billion dollars in January. Pointing out that companies in Europe, the largest export market of the sector, are reluctant to make new investments due to both high financing costs and never-ending geopolitical risks, Kutlu Karavelioğlu, President of the Machinery Exporters Association, said: We said that we would use the Green Deal to improve our adaptation processes. “Our Twin Transformation UR-GE Project in this context was deemed worthy of the best practice example award of our Ministry of Commerce in terms of needs analysis and cluster road map creation,” he said.
According to the consolidated data of the machinery manufacturing industry, Turkey’s total machinery exports, including free zones, in January decreased by 2.6 percent compared to the same period of the previous year and reached 2.1 billion dollars. Accordingly, machinery exports, which closed the last quarter of last year on a horizontal course with a total export of 7 billion dollars, started the year with a decrease of 7 thousand tons in quantity and 50 million dollars in value. While a decrease was observed in exports of domestic and industrial refrigeration machines and machine tools on a monthly basis; internal combustion engines, textile and clothing machinery, and turbine, turbo-jet and hydraulic systems differentiated positively. The almost 30 percent decrease in exports to Russia, which occurred as a result of the intervention of the global banking system, was the reason why the sector, which continued to increase exports to the two largest export markets, Germany and the USA, in January, could not achieve the results of the same period last year.
“Why is employment increasing while turnover is decreasing in Europe?”
While machinery production and exports do not increase in the world, the order density is high; Stating that they started 2024 in the shadow of global economic concerns after a successful year with 22.9 percent production and 10.6 percent export increase, Machinery Exporters Association President Kutlu Karavelioğlu evaluated the developments in Turkey’s main export market, the European Union, as follows:
“European companies, a significant portion of which are our loyal customers, have been reluctant to invest since the spring of 2023 due to both high financing costs and never-ending geopolitical risks. This situation caused an annual real turnover decrease of 1.2 percent in the European machinery manufacturing sector, and it is estimated that the decrease will reach 2.2 percent in 2024. The decrease in the competitiveness of the European industry was actually masked for a while due to the compensatory effect of the large orders received after the pandemic. It seems that the deliveries made during that period went to stocks rather than consumption, ultimately preventing new orders and pausing investments. This being the case, it is thought-provoking that although the production of the European machinery industry has decreased, its employment has increased by 1.2 percent and will increase by around 0.7 percent next year. Behind this strategic approach lies the concern to protect qualified personnel who have been trained with great effort, despite wage increases and loss of productivity.”
“Our machinery factories turned into educational institutions”
Underlining that in addition to government supports to increase employment in Europe, short-term or flexible working models are being diversified, Karavelioğlu evaluated the increase in the sector’s loss of qualified personnel in Turkey in recent years as follows:
“European countries, which have difficulty in attracting new generations who have moved away from industry to advanced engineering fields, especially machinery manufacturing, are trying to attract qualified personnel from us by attracting the young people raised by Turkey. Open attacks against our engineers and software developers pose a serious threat to the future of our industry, which naturally rises on SMEs. Moreover, during this process, almost the entire world is focused on the interest rate cuts that will occur in the second half of the year; This is happening while there is no development that would attract investments in the short term, other than the decline in global energy and raw material costs. Turkey’s machinery factories have turned into an educational institution that trains and exports designers and technical people, first to our defense industry and then to Europe; We still haven’t given a diploma. Intellectual property issue aside, we have to see that these losses will have heavy costs for the survival of the business.”
“We will solve the S-rating issue on the digital platform”
Pointing out that some of the orders, which are expected to increase towards the summer, will be tied to new conditions regarding sustainability, Karavelioğlu said:
“In the first days of the recession in the global economy, we said that we would use this period, when our businesses would be less busy, to improve our harmonization processes with the European Green Deal. We are developing various methods and tools in order to turn the road map we have drawn in our Sustainability Action Plan Report into concrete practice and to lead the way in the implementation of the designed recipes on a company scale. Our Twin Transformation UR-GE Project was deemed worthy of the best practice example award of our Ministry of Commerce in terms of needs analysis and cluster road map creation. It is not possible to produce effective solutions for our members, whose numbers will increase by more than 9 percent to 22,700 in 2023, with our online training or field installers. We have moved almost all the projects and services of our Association, which is responsible for serving the largest number of exporters in Turkey, to the digital environment. “We are trying to bring the tool sets and S-rating mechanisms that we have developed in accordance with the German Sustainability Codex on sustainability to the platform and offer them to the benefit of not only machinery manufacturers but also the general manufacturing industry.”
“The machinery industry cannot survive on its own merits”
Emphasizing that high value-added export sectors are considered the apple of the eye of the economy in all developed countries, Karavelioğlu concluded his words as follows:
“We always say that the protective and protective mechanisms of the state play a major role in our machinery sector producing 70 percent more production and exporting 40 percent more value compared to 2019 before the pandemic, diversifying technology and products, increasing their added value and competitiveness, and strengthening their agility and durability.
We often feel the need to reiterate that this situation is valid for all countries that claim to develop their own technologies, starting from advanced countries.
A situation where these supports do not exist or do not continue would be an expression of defeat or victimization for the machinery sector of any country. This sector, which has an SME structure, is not appreciated anywhere in the world. Despite this, the fact that imports increased by 20.1 percent and reached 45.6 billion dollars in 2023, which we completed with a 10.6 percent increase and 28.2 billion dollars in exports, shows that it will not be possible to close our foreign trade deficit by simply increasing exports or to protect the domestic market from unqualified goods by increasing production. is showing. We think that the open doors in our Investment Incentive Legislation must be closed urgently in order for the measures taken in the import regime to be successful.”
