Europe ‘Losing’ Textile Industry, Trade Group Warns

Why It Matters

The decline erodes critical supply chains for healthcare, defense and automotive sectors and jeopardizes the EU’s Green Deal climate‑neutral targets, making swift policy intervention essential for economic and environmental stability.

Key Takeaways

• 1.3 million workers, 200,000 firms face closures across Europe.
• Non‑wovens output fell 2.2% by 2025.
• Textile employment down 4.6% in 2025, hitting record low.
• EU’s Industrial Accelerator Act aims to boost local textile production.
• Customs‑duty exemption (€150 ≈ $165) removal targets Shein, Temu.

Pulse Analysis

Europe’s textile sector is at a tipping point. After three years of consecutive declines, the industry now supports roughly 1.3 million employees and 200,000 small‑to‑medium enterprises, yet production volumes keep shrinking. The non‑wovens segment slipped 2.2% by 2025, and overall employment dropped 4.6% last year, reflecting a perfect storm of soaring energy prices, tepid consumer demand, and aggressive Asian imports. These pressures are compounded by digital platform competition and a regulatory environment many firms deem restrictive, accelerating factory closures across the continent.

In response, the European Union is drafting a suite of measures aimed at reviving competitiveness. The upcoming Industrial Accelerator Act seeks to channel investment into high‑value textile manufacturing, while customs reforms—including the removal of the €150 (≈$165) duty exemption and a proposed “deemed importer” regime—target unfair advantages enjoyed by overseas e‑tailers such as Shein and Temu. However, critics argue that the timeline—particularly the 2028 rollout of the importer system—is too slow to stem the current wave of closures. Immediate actions to lower energy costs and harmonize safety standards for imports are seen as essential stop‑gaps.

Beyond the fashion runway, the sector underpins critical supply chains for healthcare, defense, and automotive industries, providing specialized high‑performance fabrics. Its erosion threatens the EU’s broader Green Deal ambitions, as a domestic manufacturing base is crucial for a circular textile economy that requires €11 billion (≈$12 billion) in capital and €6.5 billion (≈$7.1 billion) in annual operating costs. Without a resilient European textile ecosystem, recycling infrastructure could collapse, raising carbon footprints and increasing reliance on foreign producers. Policymakers therefore face a narrow window to balance economic revitalization with sustainability goals, ensuring Europe retains both its industrial expertise and climate leadership.