TURKISH MANUFACTURING SECTOR

MANUFACTURING INDUSTRY AND THE STATUS OF TURKISH MANUFACTURING SECTOR

The place of manufacturing industry in the economy is the most basic indicator of the development process of a country. The rapidly growing countries are countries with large manufacturing industries. As the countries evolve, the share of the sectors within the economy also changes. Priority sectors based on natural resources such as agriculture have a significant share in the economy, and as the country develops, this share ceases to the manufacturing sector and the share of the service sector also increases. In the development literature, this change is called a structural transformation. Apart from this basic transformation, the composition of the industry also changes in the development process; As income increases, the composition of the manufacturing industry shifts “from light industrial towards heavy industrial” with the definitions used by the authors in the years they have worked. Turkish Industry

Nowadays, classification to take into account the technological, labor quality and knowledge levels used by the sectors has begun to be used to express the change in the composition of the manufacturing industry. The classification used by Syrquin and Chenery implies that for that period, the low-technology industries pointed out the structure that was transformed into high-tech industries.

Status of Turkish Manufacturing Sector

In emerging economies as a consequence of structural transformation as emphasized by Chenery and Syrquin, the share of the manufacturing industry in the economy rises first, and in the later stages of development, it decreases while the share of the service sector is increasing. In developed countries such as the USA, Japan and Germany, this decline has entered the process. According to the results of this study, there was an increase in the share of manufacturing industry in Turkey during the period 1970-2006. Indicators indicate that this process, which can be defined as a reverse U, in the Turkish Industry, is in the growing part of the development trend, but it has not yet reached the peak. In other words, there is a process in the economy that increases the share of the manufacturing sector. The crucial point here is how the continuation of this increase in the international conjuncture today will be achieved. Because, even in a country like Spain that has started to become late industrialization, the share of manufacturing has begun to decrease. This suggests that a development in the new conjuncture created by the globalization process can be entered earlier in the process of "deindustrialization" in the newly industrializing countries. Such an environment increases the importance of the question that how the continuation will be ensured to keep the growth of manufacturing industry in Turkey. Another issue that needs to be considered in connection with this problem is the change in composition of the manufacturing sector. According to the assessment presented in chapter 3, a significant increase has been realized in the share of goods entering the high and medium-high technology manufacturing group in the sector in Turkey. On the other hand, the share of the goods entering the low-tech group started to decrease in the post-2000 period. A similar development is observed in the exports. However, compared with South Korea high-tech and medium-high speed increase in the share of goods entering the group it is quite low in Turkey.

In the last thirty years period, a very turbulent economic development has occurred and deep crises have emerged. For this reason, in addition to the above structural changes, it is useful to briefly consider how the Turkish Industry and manufacturing sector reacted to the general trend of the economy. In the years when the economy expanded, the manufacturing sector's growth rates were higher than the GNP growth rates. In the crisis, the reaction of the manufacturing sector to the contraction in the economy has changed over time. In the 1979-1980 and 1994 crises, the contraction in the manufacturing sector took place even more sharply than the contraction of the economy. However, in the 1999 and 2001 crises, the situation reversed and the contraction in the manufacturing sector remained at a lower level than the whole of the economy. Based on this assessment, it would not be wrong to say that there is a strengthening in the structure of the manufacturing industry. It represents the strong side of the economy, especially apart form the times of crisis. After 1990, due to global integration and the Customs Union was signed in 1996 both in terms of Turkey, is a period when regional integration is in importance. Despite the Customs Union, China and India factors, production in different branches of the manufacturing industry continues to increase in Turkey.

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