Bulgarian Machine Building Faces Challenges: Drop in Turnover and Expectations of Maintaining the Negative Trend
Bulgarian machine building is reporting serious drops in turnover since the beginning of the year, with experts predicting a deepening of this negative trend by the end of 2025. This was stated in an interview for the Bulgarian Telegraph Agency (BTA) by the chairman of the Bulgarian Branch Chamber of Machine Building, Violyn Nenov. According to him, the trend is valid for the entire industrial production. Data from the National Statistical Institute (NSI) show that the annual index as of April 2025 reported a decrease of 10.4%, and in June - of 8.2%.
"The situation in machine building is similar," notes Nenov. "There is some slight improvement for the first half of 2025 in the "Machines and equipment" sector, but it is also volatile."
The conversation was held in connection with Machine Builder's Day, a professional holiday, which has been celebrated since 1971 by a decision of the Council of Ministers. The holiday is celebrated on the second Sunday in October.
Within the framework of the international exhibition for machines and technologies in metalworking MACHTECH & INNOTECH EXPO at the beginning of October, the Chamber initiated the revival of the holiday. Violyn Nenov emphasized that this day is recognition of the work of generations of engineers, technologists, designers and workers who have created, preserved and developed Bulgarian machine building. According to him, the holiday should be celebrated with pride. He emphasized that the accompanying events could provide Bulgarian society with more information about the sector, which is fundamental to the industry and offers good working conditions and remuneration.
Bulgaria has the potential to regain its positions in the production of metal-cutting machines, hydraulics and other sectors, but Nenov expressed skepticism about the possibility of regaining leadership in machine building due to lost time and intensified competition on a global scale.
The number of active machine-building enterprises remains below 5000
According to data from the Ministry of Economy from 2024, there are just under 5000 active machine-building enterprises in Bulgaria. The chairman of the Chamber notes that the real number is likely to be larger, but the exact number is difficult to determine. The leading position in the sector is maintained by "Production of machinery and equipment" since the beginning of the year. At the same time, in "Production of metal products without machines and equipment" the decline from last year continues.
"The data show that the situation has not improved qualitatively, that is, we continue to have a downward trend, but not in all companies and sub-sectors," explains Nenov. He expressed hope that the trend would not deepen by the end of the year. For the "Machines and equipment" sector, growth is observed during the first five months of the year compared to the same period last year, although they are minimal.
Geopolitics and other factors determine the results
As reasons for the declines in machine building, the chairman of the Chamber pointed to geopolitical factors, the shortage of qualified personnel, energy policies and others.
The expectations of the industry are that with the continuation of the program for energy support for businesses, some of the problems will be solved. Nenov assessed the change in the program as positive. He expressed his opinion that the program, delayed in part due to expectations of lower electricity costs in the summer, will now start to function.
The industry continues to face difficulties related to disruptions in supply chains and deadlines, as well as the quality of supplies. This is a consequence of the geopolitical situation.
It is difficult to outline an overall trend for machine building, as it also includes the defense industry. Although there is an increase in the indicators in the enterprises of the defense industry, the chairman of the Chamber emphasized that this does not mean an improvement in the indicators in the entire sector.
Another problem, according to Nenov, is the increase in the minimum wage, which leads to an increase in the average, stimulating unqualified workers and remunerating well-qualified specialists.
The new US customs policies and their consequences
The new customs policy of the former US President Donald Trump, although Bulgarian machine building does not have a significant share of its exports to the US, affects the sector. The reason is that companies in the industry export large quantities to Europe and other parts of the world, which are also affected by the customs tariffs. The problem is the taxation upon export to the US of 50% on the entire products containing metal parts, while this duty is for metals, and for the other components it should be the specified 15%. According to Nenov, the state's support for market diversification is the right approach, but it does not lead to quick results.
The geographical transformation of exports is a difficult process, as there are mainly two types of manufacturers in the country: of finished products and subcontractors. Manufacturers of finished products cannot easily change their production. Their main markets are Europe, South America and Asia. The second group of companies work on orders from foreign companies, mainly European, with a large part of them from Germany. These companies are experiencing difficulties due to the reduced volume of orders, caused by the shrinking of the economies of Germany and other European countries. According to the chairman of the Chamber, these companies can hardly expand their market, as they work on specific orders.
The lack of staff – a chronic problem
The lack of staff remains a problem for machine building. The deficit of qualified specialists is palpable throughout the industry and in machine building as a major sector of the economy. Nenov noted that it is difficult to make accurate calculations of the deficit due to the dynamics of the process. The trend remains negative, and the process of training senior engineering staff takes at least 10 years.
The efforts of the Ministry of Education and Science towards modernization of secondary vocational education are important. The project should be completed in 2027, and from the 2026/2027 school year, training in new professions and curricula will begin. This should improve training in secondary education. Nenov warned that this will take time.
At the moment, machine-building companies are solving the staffing problem by additionally training specialists, which is an uncharacteristic activity, associated with significant costs.
The import of staff from third countries is applied, but there is no information on significant progress. Engineering staff with high qualifications are difficult to find in third countries as well. The problems with language and social security further complicate the situation. Nenov pointed out that the import of labor does not solve the problem.
The return of specialists – individual cases
Regarding the return of qualified Bulgarian specialists, Nenov noted that there are only individual cases among the engineering and technical staff in machine building. He pointed to the way of life abroad, the stability of the position held and the internal political instability in Bulgaria as factors that affect their decision. In the IT sector and some other sectors, there is a return of specialists. In the US and Western countries, qualified engineers are in deficit and highly paid. On the other hand, there is a trend for qualified workers such as welders to return, but according to the data of the companies, they do not stay long enough to have an effect.