According to the consolidated data of the machinery manufacturing industry shared by the Machinery Exporters Association (MAİB), Turkey’s total machinery exports, including free zones, in the first 4 months of 2025 was 8.9 billion dollars. Kutlu Karavelioğlu, President of the Machinery Exporters’ Association, stated that although the downward revision of growth forecasts for the global economy suppressed investment decisions, the positive path of trade negotiations between the USA and China could alleviate the effects of uncertainties and said, “Dependence on China in the supply of raw materials and elements that play a critical role in the value chains of strategic sectors may pave the way for the West to adopt a more cautious and conciliatory attitude. By closely following Germany’s increasing sustainability and innovation-oriented strategies, we will adopt a high energy efficiency, low carbon footprint.” “It is important that we develop solutions that are compatible with digital transformation and are compatible with digital transformation,” he said.
According to the consolidated data of the machinery manufacturing industry, total machinery exports, including free zones, decreased by 0.8% in the January-April period, reaching 8.9 billion dollars. Machinery manufacturers, whose exports decreased by 6% in terms of quantity, increased their average unit prices by 5.6%. According to annual data, exports increased by 0.6% to 28.3 billion dollars. While 1 billion dollars worth of machinery was exported to Germany, which was going through the most stagnant periods in its history, the amount reached 550 million dollars with a limited increase of 0.7% in the US market, where stagflation concerns were experienced. Exports to Italy, which ranks third, increased by 14.5%, approaching 400 million dollars. While there was a contraction only in Russia and Iraq among the top 10 countries with the highest exports in April, increases between 16.8% and 59.2% were seen in the other 8 countries. Exports of internal combustion engines and their components, one of the sub-branches that maintain the performance of the sector, increased by 3.3% to 815 million dollars. While construction and mining machinery exports decreased by 22.3% due to the slowdown in the global construction sector; An increase of over 15% was recorded in textile-garment machinery, and approximately 10% in turbine, turbojet, hydraulic systems, food and paper-printing machines.
“Our hope is from the second half of the year”
Pointing out that we are going through a period in which countries place foreign trade at the center of their strategies for protecting their geopolitical influence and global leadership, Kutlu Karavelioğlu, President of the Machinery Exporters’ Association, stated that they expect the global uncertainty brought by this trend to continue until the end of the second quarter and evaluated the process as follows:
“Although the US and China suspending the tariffs they announced to impose on each other for 90 days is an important threshold in trade negotiations, the uncertainties associated with Trump will obviously never end. The new conjuncture that will be created by the balance that will be created will probably make Turkey’s position in the global supply chain more advantageous. However, the uncertainty is at its highest.”
Bold steps regarding global investments should not be expected in a period of intense investment. As a matter of fact, the fact that the export demand index announced by the Turkish Exporters Assembly decreased by 1.3% in March compared to the previous month and fell to 99.0 levels and remained below the long-term average confirms this. Global industrial PMI, which recovered limitedly in the first two months of 2025, fell into the contraction zone again with 49.8 points in April. Although a limited improvement is observed in employment rates and industrial production, the weakness in key indicators such as consumer confidence, market expectations and inflation on a global scale negatively affects exports. If trade negotiations enter a positive path, these uncertainties may be alleviated. “Dependency on China, especially in the supply of raw materials and elements that play a critical role in the value chains of strategic sectors such as automotive, energy conversion technologies, microelectronics and defense, may pave the way for the West to take a more cautious and conciliatory attitude.”
“Germany will reshape its industrial policies”
Pointing out that the European Union is approaching the limit of its strategy to maintain its competitiveness by regulating bilateral relations for its own benefit, Karavelioğlu said:
“It is observed that the EU has adopted a more active, independent and decisive approach to ensure supply security in critical raw materials and high technology. This transformation is also part of the effort to achieve a stronger position in global geopolitical balances as well as the goal of economic sustainability. In Germany, where the new government has been established, reshaping industrial policies with extra-budgetary special financing packages and identifying critical investment areas will be a priority.
The fact that industry representatives, especially VDMA, one of Germany’s well-established industrial organizations, took part in the preparation of the new government program is also an indication of determination. At EU level; Strengthening the single market with harmonized product sustainability requirements, reducing trade barriers, improving the competitive environment and increasing the competitiveness of businesses offering sustainable products will remain its strategic priority.”
“The first movements have begun to be seen in the EU”
Stating that they started to see a movement in the first quarter, when the Euro Zone exceeded the forecasts and grew by 0.4%, Karavelioğlu commented on the developments in the main market of the machinery industry as follows:
“Data from the German Federal Statistical Office (Destatis) points to an unexpected recovery in orders in February. The strong increase in domestic orders and the recovery of foreign demand indicate that the needs for large plant orders and critical parts have revived. Before the tariff crisis in April,
Production increased by 3% in March; The first quarter recorded the largest quarterly increase since the beginning of 2022. Modernization investments in Germany’s domestic market can provide us with a competitive advantage in the supply of high-tech products. However, despite this positive picture, cost pressure and supply chain problems, which VDMA emphasizes as risks, make new investment decisions in Europe difficult. While they discuss overcoming these challenges, it is critical that we develop solutions that are energy efficient, have a low carbon footprint and are compatible with digital transformation, by following Germany’s increasing sustainability and innovation-oriented strategies. We consider Eximbank’s news of 1 billion euros, 10-year maturity, for compliance with the EU Border Carbon Regulation, announced by our Ministry of Commerce, as an important financial support.”
“Our domestic market has been dominated by the Far East”
Stating that the machinery industry was struggling with difficulties during this period, which offered important opportunities in terms of supply chain integration and technology development, Karavelioğlu said:
“Additional tightening measures aimed at controlling the fluctuation in March created a new wave that deepened the contraction in domestic demand while increasing financing costs. With the effect of the contraction in production that lasted for more than a year, the decline in machinery production reached up to 11.4% in March; April data may be even more negative. The machinery sector may be the area experiencing these difficulties the most, with capacity utilization rates of around 71% in the first quarter and turnover data lagging behind the manufacturing industry average. Although domestic cost inflation is higher than the general manufacturing industry average, “The preservation of employment shows the belief that our sector will quickly return to its previous performance after this turbulence.”
Karavelioğlu pointed out that the contribution of the 4% decline in machinery imports at the end of March, which amounted to 43.7 billion dollars in the last 12 months, to the foreign trade balance reached 2 billion dollars, and concluded his words as follows:
“We wish that the decline in machinery imports was not due to the contraction in domestic demand, but as a result of the trend of protecting the high-tech manufacturing infrastructure that has become widespread on a global scale. If this had been possible, we could have observed more peacefully the contribution of the decline in imports to the machinery foreign trade balance. The fact that machinery imports from China increased by 14.6% in the first quarter of the year, reaching 3 billion dollars, and imports from India and Vietnam also increased noticeably, make it hesitant to evaluate the opportunities offered by the global conjuncture in favor of domestic manufacturers.” “It may make us think that we are staying.”ries, and even making additions and relative increases, albeit in limited numbers, is a positive step in this direction. However, we know that our demand for the complete removal of the exemption with a provision that additional customs duties are also applied to imports carried out within the scope of investment incentive certificates is being kept warm by our Ministry of Trade and our Ministry of Industry and Technology. The domestic and foreign conjuncture will not be more favorable than now for this development, which we believe has become vital against the subsidized attacks of the Far East that discourage the entire world.”