Euratex: European textile and clothing industry shrinks for the third year in a row

The European textile and clothing industry shrank for the third year in a row in the 2025 financial year. This emerges from the annual report of the Euratex industry association. The report documents a continued decline in production, employment and confidence in the industry.

According to the report, production volumes continued to fall in 2025. Textile production fell by 1.6 percent, while clothing production recorded a steeper decline of 4.5 percent compared to the previous year. Sales stabilized slightly in the fourth quarter compared to the third quarter. However, on an annual basis there was still a decline of minus 1.1 percent for textiles and minus 1.9 percent for clothing. The largest declines in textile production were measured in Spain (17 percent), Croatia (8.3 percent) and Germany (seven percent).

Imports fall, trade deficit decreases

In international trade, the European Union’s trade deficit decreased, which meant that the difference between imports and exports narrowed. In the fourth quarter, imports from non-EU countries fell by 8.1 percent in value terms. This was related to lower energy prices and weak domestic demand. Imports of textiles and clothing from non-EU countries fell by eleven or 7.2 percent in the period from October to December.

Employment is shrinking, differences between countries

The downward trend in employment also continues. In the fourth quarter of 2025, the number of jobs in the textile sector fell by 4.8 percent on an annual basis and in the clothing sector by 1.0 percent. Compared to the period before the pandemic, employment in the textile sector fell by 14 percent and in the clothing sector by 16 percent. According to Euratex, factories in Europe are closing every week.

Development varies from country to country. In the clothing sector, employment increased in Spain (28 percent), the Czech Republic (eleven percent) and Denmark (six percent), while Croatia, Poland and Lithuania, among others, recorded declines.

Confidence is falling due to a lack of new orders

Confidence in the industry remains low. In March 2026, the economic indicator fell by 2.7 points in the textile sector and by 0.9 points in the clothing sector compared to the previous month. According to Euratex, companies have too few new orders and production prospects are deteriorating. The association is calling on the European Commission and member states to take action by the end of 2026, including reducing energy costs and cutting bureaucracy.