VDMA noted a significant drop in German machinery exports to Turkey
In the first five months of this year, German exports of rubber and plastic machinery to Turkey fell by nearly 5 percent compared to the same period last year.
The 4.7% year-on-year fall made Turkey's economic difficulties "increasingly apparent", the German rubber and Plastics machinery trade association (VDMA) said.
The Turkish lira has fallen sharply against the euro as a result of US sanctions and punitive tariffs on Turkey, a negative trend that the VDMA expects to continue in the coming months.
In July 2018, the average value of 1 lira was still 0.18 euros. In 2017, it averaged 0.24 euros, compared with 0.30 euros in the previous year.
VDMA chief economist Ralph Wiechers said: "This makes the cost of imports much higher for Turkish customers. However, the weak lira is also a huge burden for all companies that borrow in foreign currencies."
Despite a slight recovery after the July elections, the overall picture for Turkey's manufacturing sector remains difficult, according to the VDMA.
However, the Purchasing Managers' index (PMI) recovered to 49 points in July from 46.8 points in June, still below the 50-point mark.
A low reading indicates a possible contraction in economic performance, the VDMA added.
While new orders fell in production and manufacturing, export orders increased for the first time in three months, with a weaker lira improving the price competitiveness of Turkish exports. However, this advantage was somewhat eroded as more primary products had to be bought from abroad.
With a market size of about 29 billion euros, Turkey is the 12th largest machinery market in the world.
More than a third of the machines sold in the market are made in China. Germany is the most important foreign machine supplier to Turkey with a 13 percent market share, followed by China at 10 percent, Italy at 9 percent, and the United Kingdom and Japan at 4 percent each.