Earthquake Rattles Istanbul, While Turkish Industry Looks Ahead

As earthquake tremors hit Istanbul and surrounding areas on Wednesday afternoon, including a 6.2 magnitude shakeup, people reacted quickly, leaving buildings and running into the streets.

Most offices were fortunately not open as it was a national holiday in Turkey.

“Small tremors continue,” an apparel industry spokesperson told Sourcing Journal, adding that anxieties were running high. Schools were announced closed for two days, leaving factory workers in the region anxious.

Istanbul authorities warned the public not to enter buildings that might be damaged following the earthquakes. 

Manufacturers who have their offices around the Istanbul area were stoic—citing that earthquakes were not unknown in the region. 

More than 20,000 people died in the northwest region, including some parts of Istanbul, when two massive quakes hit the region in 1999. In 2023, the damage and loss of lives was extensive as a 7.8 magnitude earthquake on destroyed buildings and more than 50,000 people lost their lives. It also left a substantial impact in the apparel production sector, causing damage to 10 percent in Turkey’s garment production, and 30.5 percent in the textile sector.

Seismic too, has been the effect of the Trump tariffs announced earlier this month. The textile sector in Turkey is being shaken out of its torpor, gathering to see if it can now really see a change of fortune. 

“We have daily and monthly reports to the industry and are also arranging webinars and talks with the members for the future strategies,” Toygar Narbay, co-chair Turkish Clothing Manufacturers Association (TGSD) told Sourcing Journal on Wednesday.

This week, the World Bank upwardly revised the outlook for Turkey, with a forecast of 3.1 percent growth.

Treasury and finance minister Mehmet Şimşek, who was in New York on Monday, and subsequently in Washington to attend the G-20, International Monetary Fund (IMF) and World Bank Spring meetings, was busy making assurances that Turkey was on a strong recovery path. 

His plan for the visit, as he shared before he left Istanbul, was to “meet with U.S. companies that plan to shift their supply to Turkey, especially following recent developments.” In his meetings over the last few days he has been reaffirming the point that Narbay made. “I think Turkey is one of the very few countries out there with a sizable manufacturing culture and capacity where we could see integration in global value chains, when it comes to the West in general, be strengthened,” he said.

It was one of the points that came up in a meeting with Secretary of the Treasury Scott K.H. Bessent, who met him along with Central Bank Governor Fatih Karahan of Turkey.

“The Secretary also inquired as to current and future actions by the Turkish government towards addressing Turkish market volatility, and Turkey’s uncertain economic outlook,” a readout from the US department of the Treasury said on Wednesday.

But is the industry actually ready to take on the manufacturing that might have to move from China?

“Absolutely so,” Narbay said, “There are approximately 55,000 factories in this sector in Turkey.  Many of them are very small, but an approximate 1.5 percent or 800 factories have more than 250 employees.” 

The European continent and U.K. account for approximately 74 percent of apparel exports from Turkey, while the North American continent accounts for less than 6 percent.

While there has been much talk about the closure of factories in the last two years, Narbay said that total bankruptcies in 2024 were 1,800, and were from across industries, out of three million companies. “If you take the numbers from the apparel industry—those are very small—but companies have been trying to find a way out because they invested too much in 2022, and with the shrinking economy the investments became empty. Given the tariffs as they were announced, a lot of manufacturing will have to shift—we have the ability to build that capacity very quickly, because so much was already invested in this area,” he said

Narbay believes that it is not only an economic situation with the tariffs, but the underlying politics. “If Trump would have asked the buyers nicely ‘Please step out of China and Vietnam,’ there would have been a conflict of interests, because companies are opportunistic. But if you raise the tariff enormously, then they have no choice but to look at their options. The problem is not just the trade deficit. There are military exercises in the China sea, there is the NATO meeting, and statement, in  2022 that China has to be watched,” he cited.

He believes there will need to be a shift, and that “Turkey has a big role, and India has a big role” in this changing world of eco-politics. 

Turkish President Recep Tayyip Erdogan announced last week  that he would travel to the U.S. to meet president Trump in mid-May, telling the local media that he would hold talks. 

Manufacturers are holding their breaths. 

Narbay said it simply. “Although we realize that the European market is very different from the U.S.  which wants less specialty items and larger number of orders—we have the capacity and can easily add in much more to access to the U.S. market.”