Mehmet Alkan doesn’t know what will become of his shoe-sole company in Türkiye’s earthquake-hit south after some of his 220 employees died and half fled, reflecting the complex transformation ahead for the industry in the region.

Forty of his workers and some families sheltered in the undamaged Alkan Taban factory in Antakya after the massive quakes on Feb. 6, which left the historical city’s unique, millennia old historical heritage in ruins.

"We only have 110 workers after some died and others left the city, so production capacity dropped," said Alkan, the manager.

The quakes and strong aftershocks killed more than 47,000 people. In addition, they destroyed or severely damaged over 230,000 buildings, leaving hundreds of thousands homeless, making it the worst disaster in Türkiye’s modern history.

The government is preparing to ramp up spending for post-quake recovery, which could lift industrial production and consumer spending, two key indicators of economic growth.

The southeastern region is rich in textile production and agriculture, which accounts for 16% of total employment and around 11% of the industrial output, a report by the Istanbul Chamber of Industry showed.

It forced millions to leave 11 southeastern provinces home to 14 million people. Some say they may not return despite Ankara’s plan to swiftly rebuild hundreds of thousands of damaged or collapsed buildings.

Challenges

Hundreds of businesses that restarted operations a month after the quakes face shortages of staff who moved to nearby villages, relatives in other cities or to government-sponsored accommodation of tents and container homes, interviews show.

"We turned our showroom into a dormitory" for employees, Alkan said. "Most of their families left the city or moved to safer village areas. They are afraid. We are waiting for others to come back."

He said the company’s shuttle used to drive up to 50 kilometers (30 miles) to collect workers from their homes, but it now travels double that distance to reach the villages.

The disaster poses a challenge ahead of the upcoming presidential and parliamentary elections, set for May 14. President Recep Tayyip Erdoğan has vowed to transform Türkiye into a competitive manufacturing power.

Erdoğan pledged a swift campaign and has said the devastated regions would be rebuilt within a year.

Business groups and economists estimate quake fallout costs of $100 billion (TL 1,895.7 billion) and a shave of one to two percentage points off the country’s gross domestic product (GDP).

The U.N. Development Programme (UNDP) said the damage from the disaster is estimated to be over $100 billion. The World Bank estimated that the quakes had caused more than $34 billion in damage, with recovery likely to double that sum.

They say that some funding meant to boost production, employment and exports under Erdoğan’s economic plan will be directed toward aid and rebuilding efforts in the area.

The government has prioritized low-interest rates to boost exports, production and investment and create new jobs as part of the current economic program, dubbed the Türkiye Economy Model.

The program aims to lower inflation by flipping the country’s chronic current account deficit to a surplus.

Last month, the country’s central bank lowered its policy rate by 50 basis points to 8.5% to support growth after the earthquakes, saying the cheaper borrowing cost would bolster recovery efforts. That brought the overall easing trend to 550 basis points since August last year.

The central bank justified the cuts by saying financial conditions must remain supportive of maintaining industrial production growth. It cited the need for more stimulus in the face of the earthquakes when it delivered the latest cut.

Reshuffling

To ease the fallout, the government has rolled out short-term work allowances for workers and easier access to loans for affected companies.

In Antakya, the hardest-hit city where dozens of blocks were flattened, sector officials and experts say only around a third of production capacity is being used a month after the earthquake.

It could take years to return to normal, bringing about a shift in demography in the area.

"We need urgent government support to start reverse migration for businesses. We are losing a qualified workforce. A safe environment with facilities like schools and social spaces needs to be set up," said Hikmet Çinçin, Antakya’s Chamber of Trade and Industry head.

More than 600,000 homes collapsed or were severely damaged across the region, official data shows, while the government promised to build at least 250,000 units within one year.

"It is tough to predict when housing and businesses will return to normal in the region. Therefore, permanent accommodations and reopened schools will be crucial," said Serdar Sayan, director of the center for social policy research (SPM) at Ankara-based TOBB University.

Sayan said the region could also see industries reshuffled as construction sector workers arrive.

"People who started new, permanent lives in other cities are mainly from the middle – and upper-income classes," while those who stayed tend to earn lower incomes and need state aid, Sayan said.

Seher Içici, who handled logistics and accounting at a textile machinery company in Kahramanmaraş, near the epicenter of the earthquakes, moved some 250 kilometers to the west with her two small children to the city of Mersin.

"We are staying temporarily since we do not have a home to return to now. We had to leave the city as we could not find temporary accommodation," Içici said.

She said that families she knew had already left the area and enrolled their children in schools elsewhere, and most won’t return until the end of the academic year.

"I cannot work right now, but I am lucky as my boss paid my salary and some support money," Içici said. "We are getting by with it for now."