In the January-November period of the year, Turkiye’s total machinery exports, including free zones, reached $25.8 billion.
In the statement made by the Machinery Exporters’ Association (MAIB), consolidated data of the machinery manufacturing industry was included.
Accordingly, Turkiye’s total machinery exports, including free zones, increased by 8.5% in the 11 months of this year compared to the same period last year, reaching $25.8 billion.
Among the branches whose exports increased rapidly in the said period, while there were rolling and casting machines with 20.6%, machine tools and pumps-compressors with 16%, and packaging machines with 17.6%, the only sub-sector whose exports decreased was textile and apparel machinery with 9%.
Providing an increase in value in all major foreign trade markets, the total sales of the sector to the top 7 markets, consisting of Germany, Russia, USA, Italy, United Kingdom, France and Spain, increased by 17% and exceeded $10 billion.
MAIB President Kutlu Karavelioglu, whose views were included in the statement, 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 expressed his thoughts on the developments in the global industry:
“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% to over $3 billion, 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.
It is natural that the exports of $7.2 billion, which we achieved with an extraordinary increase of 21% in the last quarter of last year, would 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 last month. In the 11-month period, when our KG prices increased from $6.2 to $7.2 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.”
“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, Karavelioglu touched upon the developments in the continent where more than 60% of Turkiye’s machinery exports take place.
Karavelioglu said, “According to World Trade Organization estimates, there is an increase, not a loss, in our machinery exports to Europe, whose imports contracted by more than 0.7% this year. 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% 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.”
“Turkiye is the most attractive machinery market”
Karavelioglu pointed out that the sector should continue its investments in order for Turkiye to get its share from the new order wave that is expected to start from the second quarter of 2024.
Emphasizing that in an environment where financing is expensive, the sectors that represent Turkiye’s technological competitiveness cannot be left to their own devices, Karavelioğlu said:
“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% in the same period, that machinery and equipment investments, which grew by 23.7% 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 Turkiye in the third quarter, Karavelioglu pointed out that although this growth reflected in the machinery industry production was positive, the increase in imports of investment goods was very high.
Karavelioglu said, “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% to $48 billion. 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 annually, with India this number will soon reach 10. China, which sold around $12 billion of machinery to Turkiye 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.”
Source: Trthaber / Prepared by Irem Yildiz