Early deindustrialization warning from the business world and decline in manufacturing share
Ahead of the new medium-term program, industrialists stated that investments are slowing down and Turkey is experiencing the danger of early deindustrialization.
While tight economic policies implemented to lower inflation continue, warnings of early deindustrialization have begun to emerge from the business world ahead of the new medium-term program. Industrialists state that factories are struggling to produce, investments are slowing down, and their weight in the economy is decreasing.
Decline in Industry Share and Employment
While the share of industry in gross domestic product was at 29 percent in 2022, it fell to 17.7 percent in the first quarter of 2026. In the same period, the share of the manufacturing industry also dropped from 23.6 percent to below 15 percent.
The share of the industrial sector in total paid employment, which was 36 percent in 2009, has now fallen below 30 percent.
Investment and Profitability Pressure
It is stated that an industrialist needs to generate an operating profit of 13.6 percent just to preserve their capital. In competitor countries, this threshold level is reportedly only 3.5 percent.
State Policies and Incentive Demands
Industrialists and economists demand that the state create a new industrial plan with an understanding of participation and accountability, and become a guiding partner.
Along with a holistic industrial policy managed from a single center, the establishment of a performance-based and transparent incentive architecture is requested.
Views of Experts and Sector Representatives
Speaking at the panel held at the ISO Assembly last week, Fatih Tamay, Board Member in Family Businesses, stated that industry has grown the country and emphasized that selective support for industrialists is essential.
Halil İbrahim Öztop, General Manager of the Development and Investment Bank, cited energy and defense as examples where the state assumes the role of buyer, noting that the bank can play a catalytic and, when necessary, pioneering role.
Economist Prof. Sinan Alçın stated that the dependency rate on foreign sources in the manufacturing industry is around 70 percent and expressed that resources are wasted in general incentives.
Economist Emre Şirin drew attention to the regression in all areas from tourism to industry, expressing that the current economic strategy has collapsed.