Earthquakes hit manufacturing in southern provinces: Report

ISTANBUL

The devastating earthquakes that hit 11 southern provinces in February last year have impacted the labor market and the manufacturing sector in those regions, according to a report by the Presidency of Strategy and Budget.

The earthquakes killed nearly 54,000 people in early February in 2023.

Skilled labor has left the quake-hit cities to find jobs in other parts of the country, while those who remained in the affected provinces shifted from the manufacturing sector to the construction industry.

The impacts of the earthquakes were far-reaching, as documented in the report. Exports from quake-hit provinces have declined by $2.9 billion.

The share of those 11 provinces in Türkiye’s total export revenues shrank from 10.2 percent to 9 percent. The exports were most affected in the provinces of Osmaniye, Hatay and Kahramanmaraş.

On top of that, workers previously employed in the manufacturing sector started to work in the construction sector after the earthquakes, causing a shortage of labor in the manufacturing industry.

The manufacturing sector was dealt another blow as businesses in those regions canceled orders, while manufacturing companies’ machinery were heavily damaged.

The share of industry in the regional GDP of the earthquake-hit provinces was 29.7 percent, while services accounted for 43.5 percent.

People living in the earthquake-hit provinces have become more dependable on state support. The number of people on social welfare increased from 1.8 million in 2022 to nearly 2 million last year.

The poverty among the elderly spread following the disaster, according to the report.

The size of a household in the affected provinces is 3.7 people, above the country’s average.

The government allocated 1 trillion Turkish Liras in the 2024 budget to finance the earthquake-related expenditure, corresponding to 9.3 percent of the central government budget.

The combined share of those 11 provinces in Türkiye’s national income was 9.9 percent or around $89.7 billion as of the end of 2022, while per capita income in those areas was $6,317, which was also below the country average.

Despite the devastating effects of the twin quakes, the Turkish economy remained resilient, growing around 4.7 percent in the first nine months of 2022.

The reports noted that the economic growth was driven largely by consumption.

“With the migration from the affected regions to the other provinces, the demand spread throughout the country and the basic needs of those affected by the earthquakes together with the expenditures made to meet the need for goods and services,” it said.

The report concluded the contraction in domestic demand that might have occurred due to earthquakes was only limited as a result of those developments.