According to Manufacturing Risk Index 2018 research carried out by the commercial real estate consulting firm Cushman&Wakefield, China has maintained the lead in global manufacturing, while Turkey with a cost advantage, infrastructure investments and geographical location, has entered the top 10 in the world.
In the research, which examines a range of risks and cost factors, including political and economic risks as well as labor cost, a comprehensive assessment of the attractiveness of 42 countries for global manufacturing was carried out.
The report said the global economy remains in good shape despite the uncertainty surrounding the future of U.S.' trade policies, the shape of Brexit in Europe and heightened geopolitical risk in the Middle East, parts of Asia and Latin America.
"Global GDP [gross domestic product] growth is forecast to accelerate to 3.2 percent in 2018 from 2.9 percent last year. Multiple factors support this outlook: The robust economic fundamentals of the U.S., Europe and China, a cautious monetary policy by the major global central banks and strong trade growth. The global exports of goods are expected to grow by 5.5 percent in 2017 - their fastest pace in five years - and by over 4 percent in 2018," the report read.
Industrial output in 2018 is projected to increase by 3.8 percent globally - its fastest rate since 2011 - and by 3.0 percent in Europe, the report said.
It also suggested that economic development and technological trends will shape the type and distribution of future manufacturing, but the sector will remain an engine of global growth. By 2020, the report said, manufacturing's share of the GDP will exceed 20 percent in the top 60 largest global economies. In China, manufacturing will still account for a massive 30 percent of the GDP in 2025. In the eurozone, manufacturing makes up 17 percent of the GDP, led by Germany with over 23 percent.
The report revealed that wage hikes and growing labor shortages in Central Europe are pushing more cost-sensitive industries east to Lithuania, Romania, Bulgaria and Turkey.
"Emerging manufacturing locations in Turkey, Romania and Bulgaria are increasing in attractiveness based primarily on cost," it added.
With infrastructure investments and the strength of its geographical location, Turkey continues to be the leading production base in the world. Its cost advantage, infrastructure investments and geographical location has enabled the country to enter among top 10 in the world. In his assessment regarding the report, Cushman&Wakefield managing partner Tuğra Gönden said economic, political and technological developments that have rapidly evolved have affected countries' positions in the production market.
Gönden also indicated that it is possible with long-term structural trends and strategic positioning to ensure growth and sustainability in an increasingly competitive global manufacturing arena.
"Located at the intersection of Europe, Asia, Russia and Africa, Turkey's geographical location and high-tech infrastructure investments offer significant advantages in terms of the global manufacturing market. Despite the geopolitical risks faced, our country continues to be the production base of Europe and the world. I believe that by correctly evaluating the location and potential of Turkey, the country will be a shining star in production in the long term," Gönden said.
