Despite a 4.1% Decline in Exports, North American and Asian Markets Show Significant Growth
Turkiye’s total machinery exports, including those from free zones, amounted to $13.5 billion in the first half of the year, according to a report by the Machinery Exporters’ Association (MAIB).
This represents a 4.1% decrease compared to the same period last year. Over the past 12 months, machinery exports have also seen a slight decline of 0.4%, totaling $27.8 billion.
European markets, particularly Germany, Italy, the United Kingdom, France, and Spain, which are key destinations for Turkiye’s machinery exports, experienced contractions ranging from 6.6% to 17.9%. This is attributed to continued stagnation in the manufacturing sector and reduced investor demand in Europe. The European Union saw a 4% decrease, while other European countries, impacted by Russian sanctions, recorded a 17% decline over six months.
However, these declines were balanced by significant growth in other regions. North American markets saw a 24% increase in exports, Latin America 11%, and Asia 14%.
“A Balanced Half-Year,” Says MAIB President
MAIB President Kutlu Karavelioglu noted that their forecasts for the first two quarters of the year largely materialized, resulting in a balanced half-year despite the slowdown in global industrial activities.
“We anticipated a challenging first half of the year,” Karavelioglu said. “We expected economic activity in target countries to pick up in the summer months with interest rate cuts from major central banks. However, delays in signs of sustained reductions in inflation postponed monetary policy easing, dampening expectations for a swift recovery. Political and geopolitical developments, including election outcomes in key markets, continue to constrain economic activities, total demand, and trade. Under these conditions, the 0.4% decline in our exports over the past 12 months may seem negligible, but the nearly 8% decrease in volume indicates a reduction in production scales and a decline in competitiveness.”
Karavelioglu also discussed the impact of global multipolarity, the search for balance, aggressive support and credit policies from China, protectionism in the EU and the US, and the influence of digital and green technology principles on production.
“We Are Advancing Faster Than Our Competitors”
Despite operating in an investment and business environment with greater uncertainties and limited opportunities compared to rival countries, Turkiye has made more rapid progress in machinery production and exports, Karavelioglu emphasized.
“Turkiye is one of the largest machinery markets globally, offering significant opportunities across all sub-sectors,” he added. “Admittedly, the current incentive system provides more benefits to importers. Imported products, backed by significant support from their home countries, contribute to inflation and generate substantial profits despite the suppressed exchange rate. Unfortunately, this process strengthens the dominance of importers, making export the most challenging and import the easiest and most lucrative business.”
Source: Trthaber / Prepared by Irem Yildiz