According to the consolidated data of the machinery manufacturing industry, at the end of the first 5 months of the year, Turkey’s machinery exports, including free zones, reached 11.7 billion dollars, matching the data of the same period last year.
According to the statement made by the Machinery Exporters Association (MAIB), in May, when record machinery exports were made at the level of 2.5 billion dollars, an export increase of 10.8 percent compared to the same period of the previous year and 31.4 percent compared to the previous month was achieved.
In May, when the decline experienced in March and April was largely eliminated, a 70.3 percent increase was observed in the USA, one of the 5 largest export markets of the Turkish machinery industry, compared to last May.
In this period, when internal combustion engine and parts exports increased by 15.2 percent, export increases in agricultural and forestry machinery, machine tools and textile and clothing machinery were over 30 percent compared to the same month of the previous year.Exports of turbines and turbojets were the main element of the record increase achieved in the USA.
“Our machinery exports to the USA will approach 2.5 billion dollars annually”
MAİB President Kutlu Karavelioğlu stated that the USA, where the wheels of the economy continued to turn rapidly before the presidential election, despite the high interest rate environment implemented by the FED, will be the market with the fastest increase in machine orders for the rest of the year.
Reminding that the uncertainties regarding Germany’s exit from recession continue, where all developments in the economy directly affect the sector, Karavelioğlu said, “German industrial production has been declining for two consecutive months, largely due to the problems in the construction sector. Considering the situation in Germany, where machinery imports decreased by 3 percent in the first quarter of this year compared to last year, it is a great success that we were able to increase our market share while maintaining our exports.” he commented.
“Although concerns have increased with the early election discussions that have come to the fore in several European countries recently, it is certain that the expected revival due to the ECB’s interest rate cuts will have a positive impact on our machinery export data.” Karavelioğlu continued as follows:
“In this period when the fragility of Europe increased, and with the sanctions against Russia, our exporters turned their eyes to the US market. While the share of Russia, which experienced a decrease in exports in the January-May period, decreased, there was a 14.7 percent increase in the USA, where 750 million dollars of machinery was exported. “If it continues at this pace, our machinery exports to the USA, to which we also make significant shipments from free zones, will approach 2.5 billion dollars by the end of the year.”
Stating that the export data in the machinery sector points to results compatible with the Istanbul Chamber of Industry’s Turkey Export Climate Index, Karavelioğlu stated that in the ISO’s report, economic activities in the supplier countries have started to mobilize and there are signs of improvement in foreign demand.
Karavelioğlu said:
“But in the new era, countries’ foreign policies will be as important a determinant as their financial policies. For example, the strategic partnership agreement signed between Russia and China will weaken our commercial connections in Russia, which we established with great effort and which have recently been disrupted due to sanctions, and will negatively affect our machinery presence. “New searches for machinery exports to Russia will come to the fore for Western businesses that are uneasy about losing this huge market to China.”
“Despite the exchange rate advantage, the decline in machinery imports is positive”
Karavelioğlu stated that they followed the decrease in the spending appetite of industrialists through different indicators in this period when financing costs were very high and continued as follows:
“Following the first quarter in which machinery and equipment investments increased by 11.9 percent, in April, when the TURKSTAT industrial index indicated a contraction in production, capital goods production decreased by 11.4 percent, while repair and installation expenses of machinery and equipment increased by 19.1 percent. This situation, which seems contradictory, indicates both that the existing machinery parks will be overhauled and used for a while longer, even if they are technologically obsolete, and that there will be a loss of ground against imports.”
Karavelioğlu said:
“In the last 4 years, when our country’s machinery and equipment investments reached 483 billion dollars, 177 billion dollars worth of machinery was produced and 146 billion dollars worth of machinery was imported. We have often repeated our warning that machinery imports create dependency on service and spare parts.
Our Ministry of Commerce continues to inform the public about improvements in foreign trade deficit and import data with its monthly statements. There is a 2.8 percent decrease in imports of electrical and non-electrical machinery in the January-May period. “We see this decline achieved by the new import regime as positive, at a time when the valuable TL limits the competitiveness of exporters but facilitates imports.”
