According to the Machinery Exporters Association (MAİB), exports of the engineering industry reached $28.3 billion in 2024 if free zones are included.
While exports on a tonnage basis fell by 4.7 percent, the average export unit price per kilogram increased by 4.2 percent. In this way, revenue from machinery exports increased by 0.3 percent last year.
The most exported sub-sectors were “domestic and industrial refrigeration machines” and “internal combustion engines and parts”, followed by “construction and mining machinery” and “washing and drying machinery”.
While exports increased the most in the “Turbine, turbojet and hydraulic cylinders” group, the sharpest decline was observed in “Electric motors and generators”.
While exports to Germany, the largest market, fell by 5.4 percent to 3 billion dollars, the deficit was offset by the US market, where there was an increase of 5.6 percent and machinery sales of 1.8 billion dollars was achieved.
“Critical days await our industry, which has overcome the difficulties in Europe with the vitality in the USA.”
In his statement on export figures and developments in the industry, Kutlu Karavelioğlu, President of the Machinery Exporters Association, said that global machinery and equipment exports, which contracted by 1 percent last year, closed 2024 with an increase of 2 percent and a limited recovery due to the increased machine prices.
Referring to the IMF's forecast that the global economy will grow by 2.8 percent in 2025, which will remain below its potential, Karavelioğlu continued his words as follows:
“This situation shows that investment in machinery and equipment cannot rise to the level of $5.5 trillion this year as in 2022, and production losses cannot be compensated. The additional tariffs that (US President-elect) Donald Trump could impose. “If he fulfills his campaign promises, he will increase world trade by 8 percent.” Reputable sources also state that it could fall to -10 percent. The result of a protectionist frenzy that could spread across the world would be that investment would remain at low levels due to rising inflation and the high interest rate environment. “In 2024, critical days await our industry, which has overcome the difficulties in Europe with the vitality in the USA.”
“We should not let any investments we initiate go to waste”
Kutlu Karavelioğlu pointed out that they expect the decline in the European machinery market to continue and gave the following assessments:
“In Europe, where political uncertainty is adding to the growing concerns, confidence in the German economy is faltering, even if the situation in comparatively smaller economies is manageable. Europe, where medium-sized companies are slowly withdrawing from production and large manufacturers.” The company is technologically behind, has to overcome the stagnation in its home market and is looking for opportunities to gain advantages in exports through new free trade agreements.
Karavelioğlu stated that the gradual withdrawal of US banks from global green funds could be seen as a new expression of polarization between the EU and the US, adding that the EU has problems with the Green Deal, which it is adhering to to maintain its status competitiveness, but receives reactions from its own industry at every stage, and that at such a time Turkey He stated that regardless of the processes or investments he initiated to increase its wealth of technology and quality classes, not remain fruitless should.
“Possible developments in Syria, Ukraine and Palestine raise great expectations”
Stating that possible developments such as the reconstruction of Syria, Ukraine and Palestine with the support of international financial programs and the opening of the restricted Russian and Israeli markets raise great expectations for 2025 and beyond, MAİB President Karavelioğlu made the following statements:
“This year our loss in sales in Russia, where our exports fell by 17.1 percent, amounted to $400 million. The trade ban with Israel also had a $250 million negative impact on our machinery exports. If we take into account that despite all this, new opportunities seem to have appeared on the horizon where we will have the opportunity to test our competitiveness, which has become much stronger since the pandemic. “
“We are more optimistic for 2025”
Kutlu Karavelioğlu noted that mechanical engineering production decreased by 8.3 percent in the period January to October 2024 and emphasized that they are more optimistic for 2025.
Karavelioğlu discussed the developments that made her optimistic:
“Although commercial credit growth is still below targets, we expect that there will be an easing depending on the path of inflation and that attempts will be made to provide relief to small and medium-sized enterprises through measures such as the job protection program and new financing options . Positive news such as the decline in interest costs on rediscount loans covers the traces of pessimism in the last quarter of 2024. Nevertheless, at a time when the deterioration in manufacturing activities and the slowdown in the global machinery orders index continues, it is important to maintain machinery and equipment investments , which began to decline after 19 quarters last year, into positive. It certainly won't be easy.
Stating that the continued appreciation of TL in the new year could increase machinery imports, Karavelioğlu added that the stronger dollar against the euro could reduce the exports of the machinery sector, which makes 47 percent of its exports in euros in dollars.
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