Despite a small drop in inbound greenfield project numbers, the latest figures on investment in Turkey show a strong increase in capital expenditure contrary to initial reports.
The number of FDI projects destined for Turkey decreased by 4.45% in 2016 to 150 from 157 in 2015. However, now full-year figures from cross-border greenfield investment monitor fDi Markets have been released, they show a 55% increase in the estimated value of capital investment destined for the country. Turkey attracted a total of $8.8bn in 2016, which generated nearly 12,500 jobs.
Of the 150 projects attracted, only 24.7% were destined for Istanbul compared with 31% in 2015. Growing destination cities in 2016 were Izmir, Manisa and Adana, which achieved growth rates of 29%, 75% and 400% respectively. The top destinations for capital expenditure were Bursa, Istanbul and Eskisehir, which together attracted 15.7% of all capital destined for Turkey.
China overtook Germany in 2016 as the leading source nation for capital investment into Turkey with a total value of $3.4bn invested. Germany-based companies also increased investments in Turkey with 42.79% more capital invested there in 2016 to a value of $1.94bn.
The leading sectors for FDI in Turkey over 2016 were coal, oil and natural gas, alternative/renewable energy (specifically solar and geothermal power) and automotive. Almost a fifth of the capital investment in Turkey was into automotive projects, with sector giants such as Bosch and Continental reinvesting in 2016. High-growth sectors for Turkey were communications, industrial machinery and chemicals.
With January 2017 data available, while project numbers are dipping slightly, capital investment is up and suggests a cautiously optimistic picture of growth.
Editor’s note: A previous story published on this site reported that greenfield capital expenditure in Turkey experienced a decline, from $6.15bn in 2015 to $3.74bn in 2016, and that only 8243 jobs has been created through these projects in 2016. Capex and jobs estimates have since been revised upwards as new data came in.
fdiintelligence – Geraldine Ewing