European Textile Industry Crisis Deepens as Factories Shut Down Across the EU

The European textile industry crisis is no longer a distant concern—it is unfolding in real time. Across multiple EU countries, textile factories are shutting down week after week, leaving behind job losses, weakened local economies, and a shrinking industrial base.

The latest EURATEX report 2025 confirms what industry insiders have been warning for years: Europe’s textile and apparel sector is facing a sustained and structural decline.

Three Years of Continuous Decline

According to the EURATEX report 2025, the European textile and apparel industry has recorded negative growth across all key performance indicators—production, turnover, and employment—for the third consecutive year (2023–2025).

This prolonged downturn signals more than a cyclical slowdown. It reflects a deeper erosion of Europe’s competitiveness in global textile manufacturing.

• Production volumes continue to contract

• Industry revenues are under pressure

• Employment levels are steadily declining

Many small and medium-sized enterprises (SMEs), which form the backbone of Europe’s textile ecosystem, are particularly vulnerable and increasingly unable to sustain operations.

What’s Driving the European Textile Industry Crisis?

The causes behind the European textile industry crisis are structural and multi-layered:

High Energy Costs

European manufacturers face significantly higher energy prices compared to global competitors. Textile production—especially processes like dyeing and finishing—is energy-intensive, making cost competitiveness extremely difficult.

Weak Consumer Demand

Persistent inflation and economic uncertainty across Europe have reduced discretionary spending, directly impacting demand for apparel and home textiles.

Rising Import Pressure from Asia

Lower-cost imports from major textile-producing countries continue to dominate the market, creating pricing pressure that European producers struggle to match.

Unfair Competition from Online Platforms

E-commerce platforms, often operating with fewer regulatory constraints, are reshaping the competitive landscape by offering ultra-low-cost products at scale.

Regulatory Burden

While sustainability and compliance standards are critical, the increasing complexity of EU regulations has added operational strain—especially for smaller manufacturers.

Policy Response vs Industry Urgency

The European Union is actively working on several initiatives, including:

• The Industrial Accelerator Act

• Reform of the Union Customs Code

• The Energy Union framework

These measures aim to strengthen industrial resilience. However, the pace of policy implementation remains a major concern.

For many companies highlighted in the EURATEX report 2025, survival is a short-term challenge—not a long-term policy discussion. Immediate interventions are needed in areas such as:

• Reducing energy costs

• Simplifying regulatory frameworks

• Strengthening market surveillance

• Ensuring fair competition

A Strategic Industry at Risk

Textiles in Europe extend far beyond fashion. While clothing, footwear, and home textiles contribute to cultural identity and craftsmanship, the sector also plays a vital role in several strategic industries:

• Healthcare: medical textiles and protective equipment

• Defense: advanced materials and uniforms

• Mobility: automotive textiles and composites

• Construction & Agriculture: technical and functional fabrics

Additionally, the textile sector is central to Europe’s circular economy goals, supporting reuse, recycling, and sustainable material innovation.

Losing this industry would not only impact jobs but also increase Europe’s dependency on external supply chains and potentially raise the global carbon footprint due to offshore production.

The Road Ahead: A Call for Immediate Action

Industry leaders are urging policymakers to act decisively before further damage becomes irreversible.

As highlighted in the EURATEX report 2025, delays in action risk accelerating factory closures, shifting production outside Europe, and undermining sustainability goals.

Mario Jorge Machado, President of EURATEX, summarized the urgency:

“If Europe is serious about maintaining its manufacturing base, it must act faster and more decisively. Every week, textile companies are closing. Production moves elsewhere, dependency increases, and the carbon footprint grows.”

Conclusion

The European textile industry crisis represents a critical turning point. Without swift and targeted intervention, Europe risks losing not just an industry, but a strategic capability that underpins multiple sectors and sustainability ambitions.

The message from the EURATEX report 2025 is clear: the time to act is now.