The European textiles and clothing sector ends the 2025 financial year with a further decline across its main macroeconomic indicators. In its annual report, Euratex, the European Apparel and Textile Confederation, confirms a continued erosion of continental competitiveness. The downturn is being driven by anaemic retail demand, structurally high energy costs and mounting pressure from Asian imports.
The 18-page report shows that the sector’s manufacturing output is continuing the downward trend that began in mid-2022. Over the whole of 2025, volumes fell by 1.6% for textiles and 4.5% for clothing compared with the previous year.
However, the final quarter showed tentative signs of sequential stabilisation, with sales almost flat compared with the third quarter. Year on year, fourth-quarter sales nevertheless fell by 1.1% for textiles and 1.9% for clothing.
On the employment front, the restructuring of the European supply chain is accelerating. In the fourth quarter of 2025, headcount in textiles fell by 4.8% and in clothing by 1.0% year on year. Compared with pre-pandemic levels, the labour pool has shrunk by 14% in the textiles industry and by 16% in the clothing sector. According to Euratex, new factory closures are being recorded across Europe every week, eroding the region’s strategic capabilities.
Divergent trends by country
In detail, the biggest year-on-year declines in the textiles sector were recorded in Spain (-17%), Croatia (-8.3%) and Germany (-7%), followed by Ireland, Austria (-5%), the Czech Republic (-4%), Portugal (-3%) and Italy (-2.4%). Not forgetting France and Poland (both at an average of -2%), as well as Denmark (-1.7%). “Employment levels in the other Member States remained relatively stable,” says the federation.
By contrast, employment levels in the clothing sector showed encouraging trends in Spain (+28% year on year), as well as in the Czech Republic (+11%) and Denmark (+6%). The steepest declines were in Croatia (-15%), Poland (-10%) and Lithuania (-9.8%). Other notable decreases were recorded in Latvia (-7.4%), Portugal (-5.8%), Germany (-3.6%), France (-2.2%) and Sweden (-2.1%). “Employment trends in Austria and Italy were close to the EU average”, says Euratex.
On the international trade front, the European Union’s trade deficit narrowed. Imports from non-EU countries fell by 8.1% by value for the sector as a whole in the fourth quarter. This decline was driven by lower energy prices and weak domestic demand. China and Bangladesh in particular saw their clothing shipments to Europe decrease over the period. Imports of extra-EU textiles and clothing slowed by 11% and 7.2% respectively over the October-December period.
Deteriorating production outlook
“If Europe really wants to preserve its manufacturing sector, it must act more quickly and with greater determination,” urges Mario Jorge Machado, president of Euratex. “Every week, textile companies are closing their doors. Production is being relocated, dependency is growing and the carbon footprint is increasing. This is exactly the opposite of what Europe wants to achieve.”
The business confidence indicator remains in the red. In March 2026, confidence fell by 2.7 points in textiles and by 0.9 points in clothing compared with the previous month. Order books deemed insufficient and a worsening production outlook are weighing heavily on managers’ morale. The textile ecosystem thus has the lowest level of confidence among the major continental industries.
Faced with this critical situation, Mario Jorge Machado, president of Euratex, is urging the European Commission and the Member States to implement immediate measures before the end of 2026. The employers’ organisation is calling for a drastic reduction in energy costs and regulatory relief.
The sector, which generates over €166 billion in revenues, is a safe haven and an essential link in the healthcare, defence and mobility markets. The absence of a level playing field is tilting the scales in favour of non-EU players, threatening the survival of 200,000 European companies.
Source: https://ww.fashionnetwork.com/