EU Textile and Apparel Industry and Trade Patterns (Updated January 2022)

The EU region as a whole remains one of the world’s leading producers of textile and apparel (T&A). The EU’s T&A production value totaled EUR135.6 bn in 2019, down around 6% from a year ago (Note: Statistical Classification of Economic Activities or NACE, sectors C13, and C14). The EU’s T&A output value was divided almost equally between textile manufacturing (EUR69.4bn) and apparel manufacturing (EUR66.2bn).

Regarding textile production, Southern and Western EU, where most developed EU members are located, such as Germany, France, and Italy, accounted for nearly 60% of EU’s textile manufacturing in 2020. Further, of EU countries’ total textile output, the share of non-woven and other technical textile products (NACE sectors C1395 and C1396) has increased from 20.2% in 2011 to 23.2% in 2019, which reflects the ongoing structural change of the sector.

Apparel manufacturing in the EU includes two primary segments: one is the medium-priced products for consumption in the mass market, which are produced primarily by developing countries in Eastern and Southern Europe, such as Poland, Hungary, and Romania, where cheap labor is relatively abundant. The other category is the high-end luxury apparel produced by developed Western EU countries, such as Italy, UK, France, and Germany.

It is also interesting to note that in Western EU countries, labor only accounted for 20.3% of the total apparel production cost in 2019, which was substantially lower than 30.1% back in 2006. This change suggests that apparel manufacturing is becoming capital and technology-intensive in some developed Western EU countries—as companies are actively adopting automation technology in garment production.

Because of their relatively high GDP per capita and the size of the population, Germany, Italy, the UK, France, and Spain accounted for nearly 60% of total apparel retail sales in the EU in 2021. Such a market structure has stayed stable over the past decade. Also, reflecting local consumers’ preference, EU apparel brands overall outperform non-EU brands in the EU retail market.

Intra-region trade is an essential feature of the EU’s textile and apparel industry. Despite the increasing pressure from cost-competitive Asian suppliers, statistics from UNComtrade show that of the EU region’s total textile imports in 2019, as much as 53.8% were in the category of intra-region trade. However, it could result from increased PPE imports from Asia, EU countries’ Intra-region trade% for textiles dropped to 40% in 2020.

Meanwhile, about one-third of EU countries’ apparel imports came from other EU members during 2019-2020. In comparison, close to 98% of apparel consumed in the United States was imported over the same period, of which more than 75% came from Asia (Eurostat, 2022; UNComtrade, 2022).

Regarding EU countries’ textile and apparel trade with non-EU members (i.e., extra-region trade), the United States remained one of the EU’s top export markets and a vital textile supplier (mainly for technical and industrial textiles). Meanwhile, Asian countries, led by China, and Bangladesh, served as the dominant apparel sourcing base outside the EU region for EU fashion brands and retailers. Turkey was another important apparel sourcing base for EU fashion companies. There is no sign that COVID-19 has shifted the trade pattern.

Additionally, Vietnam was EU’s sixth-largest extra-region apparel supplier in 2020 (after China, Bangladesh, Turkey, India, and Cambodia), accounting for 4% in value. The EU-Vietnam Free Trade Agreement which took effect in August 2020, could encourage more EU apparel sourcing from the country in the long run.

According to the European Apparel and Textile Federation (Euratex), the EU textile and apparel industry continued to recover from COVID-19. For example, the value of textile output has already reached its pre-pandemic level by the end of September 2021. However, apparel production is still lagging behind. Euratex further warns that 2022 could be a challenging year for the EU textile and apparel industry given the “high prices in raw materials and energy, supply chain disruptions and additional sanitary restrictions related to the Covid-19 pandemic.”

by Sheng Lu

Author: Sheng Lu

Professor @ University of Delaware

20 thoughts on “EU Textile and Apparel Industry and Trade Patterns (Updated January 2022)”

  1. Great article! The data presented did well to supplement your main points. When it comes to trade, specifically textile and apparel trade, many minds automatically think of the U.S., China, India, Bangladesh, etc. I feel like many individuals fail to analyze the unique role and state of the textile and apparel industry in Europe. Similar to other regions of the world, labor in apparel production typically resides in less developed countries. This is best exemplified by the significant decrease in labor cost between 2006 and 2009 in Western Europe, which indicates a shift towards more capital-intensive industries. Furthermore, the EU has a system called the Intra-region trade to reduce trade barriers amongst EU, which has a complete supply chain. Despite the convenience and benefits created by this network, I found it puzzling that the region’s trade % for textiles decreased 40% in 2020 given that we were in peak pandemic when PPE textiles were in high demand. Lastly, I found your description of the EU textile and apparel industry’s effect on other areas of the world important as the intra-trade system results in their main competitors being located in other places. Once again, this article was a satisfactory supplement to the information presented in the lecture as it demonstrated real world implications of the state of the EU textile and apparel industry.

    1. Hi Sydney! I really enjoyed your point about how so often we tend to forget about the significant role Europe plays in the textile industry. So often we hear about China, Bangladesh, Vietnam, Japan, etc., but I feel as though I have never even had a super strong focus on Europe as a textile and apparel industry player until this class. I found it really interesting how the European market has two sections, one being medium-priced products for consumption in the mass market that are produced in countries like Poland and Hungary, and the other being high-end luxury apparel produced by developed countries, such as Italy and France. From the article, I feel as though that the Intra-region trade in the EU textile and apparel sector allows them to focus their products more on their own countries, rather than focusing on exporting all of it. I found it extremely interesting how “local consumers’ preference, EU apparel brands overall outperform non-EU brands in the EU retail market”. I feel as though that shows us that European consumers are more invested in where exactly their clothing is being produced and have a greater focus on sustainability and supporting their own country’s work.

    2. You made some excellent points! The fact that the EU remains one of the world’s largest textile and apparel producers and exporters is often overlooked. Notably, many high-wage western EU countries continue to manufacture apparel products and they do not necessarily rely on fancy new technologies (you may think about the video in our lectures). However, the industry’s lack of labor force (especially the young generation) could be a long-term challenge.

  2. Great article! The EU region has an important position for producing countries of textiles and clothing. The largest producers of textiles and clothing are Italy, France, Germany, Spain and Portugal. Southern EU countries contribute more to total garment production. Northern countries such as Germany, Belgium, the Netherlands and Austria contribute more to textile production, especially for industrial use. The GARMENT industry in the European Union is particularly diverse, with mid-priced and high-end products for the mass market. It also makes the market particularly broad, increasing their exports. The garment manufacturing industry in Western European countries is also changing. Economic growth makes them gradually shift from producing labor-intensive products to capital-intensive products. This is the same phenomenon that is now transforming manufacturing in many countries. Among them, European producers are world leaders in technical textiles and non-woven fabrics (industrial filters, sanitary products, automotive and medical products, etc.) as well as high quality garments with high design content. In Europe, Germany, Poland and Italy are the main importers of clothing within the EU. Europe’s non-EU garment imports are dominated by Asian countries, with China, Bangladesh and Turkey the top three exporters. Production in China has become increasingly expensive due to labor shortages and the trade war with the United States. China’s clothing market has been severely affected by the COVID-19 pandemic, with some production halted and imports reduced. Apparel manufacturers are increasingly shifting operations to countries such as Myanmar, Cambodia, Vietnam, Pakistan and Bangladesh, and their fast fashion volumes are expected to shift to suppliers in other developing countries. The impact of COVID-19 on the EU textile and clothing sector is recovering. This is a very good blog that has allowed me to learn a lot about the EU.

  3. The EU region has an important position for producing countries of textiles and clothing. The largest producers of textiles and clothing are Italy, France, Germany, Spain and Portugal. Southern EU countries contribute more to total garment production. Northern countries such as Germany, Belgium, the Netherlands and Austria contribute more to textile production, especially for industrial use. The GARMENT industry in the European Union is particularly diverse, with mid-priced and high-end products for the mass market. It also makes the market particularly broad, increasing their exports. The garment manufacturing industry in Western European countries is also changing. Economic growth makes them gradually shift from producing labor-intensive products to capital-intensive products. This is the same phenomenon that is now transforming manufacturing in many countries. Among them, European producers are world leaders in technical textiles and non-woven fabrics (industrial filters, sanitary products, automotive and medical products, etc.) as well as high-quality garments with high design content. In Europe, Germany, Poland and Italy are the main importers of clothing within the EU. Europe’s non-EU garment imports are dominated by Asian countries, with China, Bangladesh and Turkey the top three exporters. Production in China has become increasingly expensive due to labor shortages and the trade war with the United States. In addition, the Chinese government has introduced new environmental legislation following the signing of the Paris Agreement on climate change in 2020. The country’s higher environmental standards are expected to force the closure of more than 80,000 Chinese factories. The decline in Chinese exports is affecting many companies’ global supply chains. China’s clothing market has been severely affected by the COVID-19 pandemic, with some production halted and imports reduced. Apparel manufacturers are increasingly shifting operations to countries such as Myanmar, Cambodia, Vietnam, Pakistan and Bangladesh, and their fast fashion volumes are expected to shift to suppliers in other developing countries. The impact of COVID-19 on the EU textile and clothing sector is recovering. This is a very good blog that has allowed me to learn a lot about the EU.

  4. From in class learnings, to this post I enjoyed learning about EU textile and apparel trade patterns. I was not aware they were one of the leading producers of T&A. Ive always thought of asian countries dominating in manufacturing. One of the most interesting things is that part of their apparel industry is placed in their developed countries. This is not the case for most apparel manufacturers around the world. From our videos giving insight into Germany, France, and Italys apparel industries you get a sense of how dedicated they are to the high end market. The makers are passionate and put hard work into perfecting the art. The fact that the apparel manufacturers in the developed countries are spending less money than the developing countries may be a sign that automation is the answer for the apparel industry. The U.S for example is abundant with machinery and capital, but can not afford domestic labor costs. They source mostly in developing countries where labor is cheap. If the U.S turns to automation machinery for apparel maybe they would save money over outsourcing. It is also interesting to me that the EU relies on intra region trade. Most of their trade is done within region rather than with other continents.

  5. The information provided did a good job of supplementing the key points. Many people think of the United States, China, India, and Bangladesh when they think of trade, particularly the textile and apparel trade. Many people, in my opinion, fail to consider the distinct role and state of the European textile and apparel industry. Labor in apparel production, like in other parts of the world, is typically found in less advanced nations. This is best demonstrated by the substantial reduction in labor costs in Western Europe between 2006 and 2009, indicating a shift toward more capital-intensive industries. Moreover, the EU has a system known as intra-region trade to decrease trade barriers within the EU, which has a full supply chain. The description of the EU textile and apparel industry’s impact on other parts of the world was also interesting to me, as the intra-trade system results in their biggest competitors being located in other parts of the world. This article, once again, provided an adequate supplement to the information presented in the lecture by demonstrating the direct ramifications of the state of the EU textile and apparel industry.

    1. Hi Carly! I completely agree with your finding that the European textile and trade industry is overlooked. You are definitely right in thinking that most people only consider less develop countries like Bangladesh and other parts of Asia when talking about textile production. We have really emphasized this in class when we have talked about the more capital good intensive countries creating textiles whereas the less developed ones are using their high labor rates for sewing and producing actual garments. I remember doing a case study question on the Intra region trade strategy in the EU. This has created many barriers and issues for the European apparel industry that can not continue to be overlooked. I also liked how the article touched on the fact that most of Europes trading relies on medium priced items and luxury or high end items. Europe is overall known by many to house a lot of the iconic luxury designer brands which is why this data validates that.

  6. After reading this article, I feel that the EU is often overlooked as one of the leading producers in the world for the textile and apparel industry. While Europe is home to many fashion capitals of the world, often European countries are overlooked for their production. There are two major categories; medium priced products produced in countries like Poland, Hungary and Romania, and high end luxury apparel produced in Germany, Italy, the UK and France. I also find the EU’s intra-region trade agreement interesting. Pre-pandemic, more than 50% of imports were between the EU, but due to increased PPE imports from Asia during the pandemic, this number dropped to 40%. I believe it is in the best interest of the EU to try to get these numbers back up in the next few years to stimulate their own economies.

  7. I think this article did a good job of discussing how EU is often times looked past when we talk about the leaders in production. I know personally, I am very unfamiliar with all that EU does in the fashion industry, but after reading this article I really am impressed. Some of the fashion capitals of the world are located in Europe and since the pandemic we have not seen as much going on in these places. We saw a lot of loss in intra-trade% in EU during the pandemic, and the EU is still trying to come back from the effects from the pandemic. The EU-free trade agreement will most definitely help in aiding this issue and allow for EU to expand its production.

  8. This article does a great job explaining EU textile and apparel trade patterns. Apparel manufacturing in the EU is so large that it includes two primary segments. One segment is the medium-priced products for consumption in the mass market which are produced primarily by developing countries in Eastern and Southern Europe such as Poland, Hungary, and Romania, where cheap labor is relatively abundant. The other segment is the high-end luxury apparel produced by developed Western EU countries, such as Italy, UK, France, and Germany. In this article, we also see that there is a change of labor for the total apparel production cost in the EU region which is interesting. In 2019, labor only accounted for 20.3% of the total apparel production cost which was much lower than it was in 2006, as it was 30.1%. This change means that apparel manufacturing is becoming capital and technology-intensive in some developed Western EU countries as companies are actively adopting automation technology in garment production.

  9. As stated in the article there has been a decreased labor costs, specifically labor accounted for 30% of total apparel production cost, while in recent years it only accounts for 20%. This is due to developed Western EU countries becoming capital and technology-intensive. As Italy, UK, France, and Germany continue to adopt automation technology in garment production, I am interested to see how it is incorporated into and/or affects the luxury market in this region. The luxury market thrives off of their reputation and craftsmanship, will technology tarnish that?

  10. This article does a great job explaining the benefits of the EU-intra region trade for textiles and apparel. One example that supports the EU-intra trade region is that in 2019, 53.8% of the EU region’s total textile imports were in intra-region trade. It was explained that this percentage could be caused by the increase in PPE imports from Asia. More importantly, consumers habits signify a preference towards EU-intra region trade; according to consumer preference, EU apparel brands outperform non-EU brands in the EU retail market.

  11. This is a great article and many great points are made supported by data. The garment industry all over the world, especially since the start of COVID-19 has been transforming drastically. The EU region still holds a very important role in the industry. It is vital to keep a steady relationship and connection between the United States and Europe to ensure more stability and certainty in apparel manufacturing. I really like how the article acknowledges the two primary segments necessary to keep Europe and the US at such high altitudes in comparison to many other places around the world.

  12. The factors that support the EU-intra reign trade textiles are that the EU’s single market strategy has given members with important financial incentives to source textiles and garments from inside the zone. It provides for free movement of goods between EU nations, but EU-based businesses must pay an average tariff rate of 6.5 percent for textiles and 11.8 percent for garments imported from outside the EU. There are two types of apparel production in the EU. One is mass-market medium-priced items made mostly in emerging nations in Eastern and Southern Europe, such as Poland, Hungary, and Romania, where low-wage labor is relatively plentiful. The high-end luxury clothes manufactured by developed Western EU nations such as Italy, the United Kingdom, France, and Germany are the second group. I was also unaware that they were a major producer of T&A. Asian countries have traditionally dominated manufacturing in my mind.

    1. Hi Halle,

      I find it quite interesting that there is a distinct juxtaposition between the types of apparel produced in the EU. As you mentioned, developing countries in the Eastern and Southern regions manufacture mass-market goods. On the other hand, world leaders like France, Germany, and Italy export handcrafted luxury products. In Asia, where T&A is a major industry, you see an equal spread of the types of products produced. As the EU continues to develop and manufacturing becomes more capital and technology intensive, will we see a shift in this juxtaposition? Will these countries still specialize in producing luxury goods? And if so, will the country of origin still hold the same value if the items are not handcrafted?

  13. The EU being one of the largest exporters of textiles and apparel is a surprise to many. I believe that most of this success is in particular to the fact that the industry has such a large market within itself. This trend that we see within EU consumers preferring EU made products plays a big role in how rapidly the industry advances. This is greatly due to the fact that the demand for EU made goods is so high. With such high levels of demand, it promotes advancement within the industry to meet them. This is what we see in the EU as they have become more productive and capital intensive. They have also been able to keep close ties with surrounding countries that they export to. This brought to mind the intra region trade deals that the United States has with countries in the CAFTA.

  14. I feel like European countries are never seen as being big producers for the world in the textile and apparel industry, but they have so many unique factors that make them desirable. Although European countries are known for their fashion and apparel they are often looked over when it comes to the production of clothing. Something that makes them unique is that, as mentioned in the article, they have eastern and southern European countries producing medium priced products for a bigger market of people, when labor is cheaper and have Western European countries making these luxury products for a smaller amount of people. Combined, both of these things appeal to almost all audiences of people and consumers.

    Reply

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