Turkey Remains a Manufacturing Hub Thanks to Low Costs Despite Risks: Report
Emerging manufacturing locations in Turkey are increasing in attractiveness due to cost, while the country remains one of the top 10 manufacturing powerhouses, according to a new report.
In American commercial real estate services company Cushman & Wakefield’s Manufacturing Risk Index 2018, Turkey ranked 10 in a 42-country list analyzing attractiveness in terms of manufacturing companies’ perspectives.
Turkey followed China, Lithuania, Malaysia, Taiwan, Canada, the U.S., Hungary, the Czech Republic and Slovakia in the list, with Cushman & Wakefield saying Turkey’s main competitive advantage at present is its lower costs.
It also stated, however, that recent geopolitical uncertainty decreased Turkey’s attractiveness for international companies.
Despite wage increases in Central Europe, CEE labor costs remain the lowest in Europe. Labor costs in Lithuania are 14 percent below Poland and 30 percent below the Czech Republic, according to the report.
“Wage hikes and growing labor shortages in Central Europe are pushing more cost-sensitive industries east to Lithuania, Romania, Bulgaria and Turkey,” read the report.
Emerging manufacturing locations in Turkey, Romania, and Bulgaria are increasing in attractiveness based primarily on cost, according to the report.
Cushman & Wakefield Managing Partner Tuğra Gönden said Turkey offered key advantages to global manufacturing companies, mainly thanks to highly attractive geographical position and growing infrastructure.
“Despite some escalating geopolitical risks, Turkey remains a key manufacturing powerhouse. We believe Turkey will climb the ladder in the long term by evaluating its position and potential accurately,” Gönden added.