As economic-update headlines go, the European Apparel and Textile Confederation’s latest strikes an especially bleak note: “Europe is losing its textile industry.”

“Every week, textile factories close across Europe,” the Brussels-based trade group, better known as Euratex, wrote Thursday. “Behind each closure: jobs lost, communities affected, strategic capabilities gone.”

For an industry that supports roughly 1.3 million workers across 200,000 mostly small and medium-sized companies, “this is not an empty statement,” Euratex said. The sector logged negative results across several key indicators for the third year in a row—a sign of what it described as a “continued erosion of competitiveness across Europe.”

Since mid-2022, for instance, manufacturing volumes have trended consistently downward, with production in sub-sectors such as nonwovens dropping 2.2 percent by 2025. Though the clothing sector saw a temporary—and perhaps illusory—“inflationary” revenue bump of roughly 5 percent in 2023, that gain vanished in 2024 and 2025 as real demand collapsed. The workforce, too, is under strain, the numbers suggest. Textile employment hit its lowest point in 2025, with losses accelerating to -4.6 percent.

But no single cause explains the downward trajectory, the trade group said. Structurally high energy costs, sluggish consumer demand, rising import pressure from Asia, unfair competition from online platforms and an increasing regulatory squeeze on European producers have all contributed to a perfect storm of stress points.

While the European Union is preparing several policy responses, including customs reform, consolidation of the bloc’s energy markets and the “Buy European” strategy known as the Industrial Accelerator Act, many companies cannot wait, Euratex said. The European Commission and member states must take “immediate action” to reduce energy costs, streamline regulation and boost market surveillance so imports meet the same safety and environmental standards as domestic goods, it added—or risk losing the sector altogether as generations of expertise drain away.

That includes staying on track with the elimination of the 150-euro customs duty exemption threshold, set for this July, which critics say has benefited overseas e-tailers like Shein and Temu, to the detriment of domestic businesses.

But other efforts, such as a planned “deemed importer” system under the Union Customs Code, will only apply in 2028, which Euratex said is “too slow” to address the current surge of non-compliant imports. The EU, it added, should adopt a regulation requiring foreign sellers to appoint a legally accountable entity on the continent.

Euratex warned that the stakes extend beyond the retail rack, saying the sector’s hollowing out not only threatens critical supply chains for the healthcare, defense and automotive industries—which rely on high-performance European textiles—but it also risks undermining the EU’s broader “Green Deal” goals of making the world’s largest single market climate-neutral by 2050. 

Already, the EU’s ambitions to build a circular textile economy face steep economic challenges—11 billion euros in capital expenditure and up to 6.5 billion euros in annual recurring costs—according to a March report by the Boston Consulting Group and ReHubs, a textile-to-textile recycling initiative backed by Euratex. Without a local industrial base, the infrastructure needed to recycle textiles will disappear along with the factories.

“If Europe is serious about maintaining its manufacturing base, it must act faster and more decisively. Every week, textile companies are closing,” Euratex president Mario Jorge Machado said in a statement. “Production moves elsewhere, dependency increases and the carbon footprint grows. That is the opposite of what Europe wants to achieve.”