European textile and apparel industry trends

The European textile and clothing industry has transitioned from a period of significant structural challenges toward signs of stabilization.

Initially, the sector faced intense competition from low-cost e-commerce imports and a substantial trade deficit, with imports valued at 122 billion euros compared to 61 billion euros in exports. During this period, less than 13 percent of clothing in the EU market was produced within the union, and the industry struggled with declining exports and employment. While the broader market faced pressure, specific segments like Croatian household textiles reported growth in revenue and profit.

By the second quarter of 2026, the industry began to show signs of smoothing out. Although apparel production continued to decrease, the decline in textile production slowed, and the textile work cycle recorded its first annual increase since early 2024. Additionally, exports returned to positive territory for the first time in nearly eighteen months, with apparel and textile exports rising by 1.3 percent and 1.5 percent, respectively.