site.btaBulgarian Machine Engineering Reporting Significant Drops in Turnover since January - Branch Chamber Head Nenov

Bulgarian mechanical engineering continues to report serious declines in turnover since the beginning of the year, with expectations that the negative trend will continue until the end of 2025, Violin Nenov, Chairman of the Bulgarian Branch Chamber of Mechanical Engineering, said in an interview with BTA. According to him, this trend applies to manufacturing in general, with data from the National Statistical Institute (NSI) showing that the annual index fell by 10.4% in April 2025 and by 8.2% in June.

"The situation is similar in mechanical engineering. The NSI reports a slight improvement for the first half of 2025 in the Machinery and Equipment sector, but it is volatile," Nenov commented.

He was interviewed by BTA's Ekaterina Toteva and Valeria Dimitrova in connection with Mechanical Engineer's Day. The professional holiday is celebrated on the second Sunday of October, as established by Council of Ministers decision of August 12, 1971.

According to data from the Ministry of Economy, as of 2024, there are just under 5,000 active machine-building companies in Bulgaria. In fact, there are quite a few more, but it is difficult to say exactly how many, noted Nenov. Since the beginning of the year, the Manufacture of Machinery and Equipment sector has remained the leader in the industry, while in one of the main sectors, Manufacture of Metal Products without Machinery and Equipment, the decline from last year continues to be significant, he noted.

The data the Chamber is receiving shows that the situation has not improved qualitatively, i.e. the downward trend continues, but not in all companies and sub-sectors. Nenov expressed the hope that this trend will not deepen by the end of the year. For the machinery and equipment sector, he noted that based on the results for the first five months of this year compared to the same period of 2024, there has been growth, albeit minimal.

Among the reasons for these results in mechanical engineering, Nenov highlighted geopolitical factors, staff shortages, energy policies, and others. The industry expects that the continuation of the energy support programme for businesses will solve some of the problems. 

The mechanical engineering branch continues to face difficulties with disrupted supply chains and deadlines, as well as with the quality of the deliveries themselves, mainly as a result of the geopolitical situation, Nenov also told BTA.

"Unfortunately, it is difficult to identify an overall trend for mechanical engineering because the industry also includes the defence industry, but I believe there has been no significant improvement in this sector either. There is no doubt that there has been an increase in the performance of companies in the defence industry, but the fact that one sector is performing well does not mean that the performance of the entire mechanical engineering branch is improving significantly," Nenov commented.

He noted that one of the reasons having a negative impact on the activity of enterprises is the significant increase in the minimum wage in recent years, which he considers unjustified. This has not only led to a forced increase in the average wage, providing a basis for a further increase in the minimum wage under the current mechanism, but also encouraged poorly qualified and inefficient workers at the expense of skilled, capable, and hard-working workers and specialists, Nenov said.

Although Bulgaria's mechanical engineering industry does not account for a significant percentage of its exports to the US, President Donald Trump's new customs policy is bound to affect this sector as well. The reason is that companies in the industry export significant quantities to Europe and other parts of the world, which are also affected by the new customs tariffs, said Nenov.

This year, the industry is again facing a shortage of personnel. This shortage is affecting the entire industry, particularly mechanical engineering as a key sector of the economy, noted the Chamber Chairman. According to him, it is difficult to estimate the labour shortage in mechanical engineering due to the dynamics of the process, which is related to both hiring and resignations. Rather, the trend continues to be unfavorable and there is no way to reverse it quickly, Nenov noted, pointing out that the process of training senior engineering personnel takes an average of at least 10 years from the start of secondary education. He noted the efforts of the Ministry of Education and Science, referring to the large-scale project for the modernization of secondary vocational education. 

He told BTA that machine-building companies are currently solving their staffing problems by training specialists to the level required to do the job. This is an unusual activity, involving considerable expense, undertaken to cover the shortfall in education. The import of personnel from third countries is practiced throughout the industry, including in mechanical engineering but, according to Nenov, there is no information about serious progress and the hiring of a sufficient number of specialists. Among the reasons for this trend is the fact that it is very difficult to find engineering personnel with a sufficiently high level of training even in third countries. From there on, language and social security issues further aggravate the situation, commented Nenov, pointing out that importing labour from third countries does not solve the problem in the industry.

Regarding the return of qualified Bulgarian specialists to their homeland, Nenov said that there are only isolated cases among engineering and technical personnel in mechanical engineering. He explains this with  the lifestyle offered abroad, the stability of the position they occupy there, as well as the instability of the domestic political situation in Bulgaria. Quite a few personnel are returning in the IT sector, and quite a few in some other sectors, but not in mechanical engineering, where there are only a few cases of highly qualified engineers, Nenov summarized, adding that in the US and Western countries, qualified engineers are in short supply and are highly paid specialists. There is a trend in Bulgaria for skilled workers to return, such as welders, but according to company data, such personnel do not stay long enough to have an effect.