May Sees Record $2.5 Billion in Exports as Turkiye Strengthens Position in Global Machinery Market
Turkiye’s machinery export sector has achieved a remarkable milestone, reaching $11.7 billion in the first five months of 2023, as reported by the Machinery Exporters Association (MAIB). This figure matches the export levels of the same period last year, demonstrating the sector’s resilience and growth.
In May alone, machinery exports hit a record $2.5 billion, representing a significant 10.8% increase compared to the same month last year, and a substantial 31.4% rise from the previous month. This rebound followed a downturn in March and April, with the United States leading the charge as the largest export market, recording a staggering 70.3% increase in machine imports from Turkiye compared to May of the previous year.
During this period, exports of internal combustion engines and parts rose by 15.2%, while agricultural and forestry machinery, machine tools, and textile and apparel machinery saw growth rates exceeding 30% year-on-year. The export of turbines and turbojets to the U.S. was a key driver of this impressive performance.
MAIB President Kutlu Karavelioglu highlighted the robust demand from the U.S. despite the high-interest rate environment maintained by the Federal Reserve. He anticipates that the U.S. will continue to be the fastest-growing market for Turkish machinery for the remainder of the year.
“The wheels of the economy continue to turn rapidly in the U.S. ahead of the presidential election,” Karavelioglu noted. He also addressed the ongoing economic uncertainties in Germany, Turkiye’s major export partner, pointing out that despite a 3% decline in Germany’s machine imports in the first quarter of the year, Turkiye managed to maintain and even increase its market share.
Karavelioglu further remarked on the potential positive impacts of the expected economic revival in Europe, spurred by the European Central Bank’s interest rate cuts, despite recent political uncertainties and early election discussions in several European countries. He acknowledged the shift in focus towards the U.S. market, particularly as exports to Russia have declined amid ongoing sanctions.
“While Russia’s share has decreased, our exports to the U.S. have increased by 14.7%, reaching $750 million in the January-May period. If this trend continues, our machine exports to the U.S. will approach $2.5 billion by year-end,” he predicted.
He also emphasized the importance of strategic partnerships and the impacts of international agreements, such as the recent strategic partnership between Russia and China, which could pose challenges for Turkish exporters in the Russian market. However, he expressed optimism about finding new opportunities in this evolving landscape.
Reflecting on Turkiye’s machine and equipment investments, Karavelioglu pointed out the 11.9% increase in machine and equipment investments in the first quarter and noted the contradictory trend of a 19.1% rise in repair and installation expenditures in April, despite a 11.4% decline in capital goods production. He explained this as an indication that older machinery is being refurbished for extended use, reducing dependency on imports.
Karavelioglu concluded by highlighting the overall positive trend in reducing import dependency, with machinery imports declining by 2.8% in the first five months of the year. He attributed this to the new import regime and the strong lira, which, while limiting export competitiveness, has made imports less attractive.
The Turkish machinery sector, with its significant investments and strategic market shifts, is poised for continued growth amidst the dynamic global economic environment.
Source: AA / Prepared by Irem Yildiz