As a pillar industry within Turkey's manufacturing and export system, the textile sector is facing unprecedented existential challenges. Industry insiders widely warn that amid multiple pressures—including sluggish external demand, soaring production costs, and intensifying international competition—the sector is navigating its most pronounced downturn in at least two decades. This adjustment transcends short-term fluctuations, exhibiting profound structural characteristics that render industrial transformation imperative.
Capacity contraction and plummeting orders weigh heavily on core industrial pillar
The winter chill gripping Turkey's textile sector is starkly evident in the data. Official statistics reveal that over 300 textile and garment enterprises have sought bankruptcy protection since the start of this year, with the sector shedding more than 300,000 jobs over the past two years – a devastating blow to the labour market. In major textile clusters such as Istanbul, Denizli, and Bursa, production halts and low operating rates have become the norm. Numerous factories have ceased operations entirely, while those still functioning maintain capacity utilisation at merely 30% to 40% of normal levels.
Exports, the industry's core pillar, have likewise suffered severe setbacks. By November this year, Turkey's combined textile and garment exports totalled US$24.1 billion. While still ranking among the nation's principal export sectors, this figure represents a decline of approximately 23.6% from the historical peak of US$31.56 billion recorded during the same period in 2022. Once bustling textile trade districts such as Istanbul's Merter and Osmanbey now exhibit significantly reduced business activity, with numerous showrooms serving buyers from Russia, Ukraine and other nations having suspended operations. Multiple merchants candidly stated that reduced orders, rising costs, and restricted financing channels constitute the core challenges. Furthermore, foreign buyers' reduced cash transactions, weakened economies in client nations, and altered perceptions of security in certain regions have further dampened buyer visitation.
Caught Between Internal and External Pressures: The Dual Stranglehold of Costs and Competition
The downturn in Turkey's textile sector stems not from a single factor but from the combined effects of internal and external pressures. Internally, rising production costs and labour supply imbalances present dual constraints. Surging energy and raw material prices continue to squeeze corporate profit margins, while high financing costs compound the difficulties. Mustafa, head of an Istanbul textile factory, admits that although companies wish to upgrade to higher value-added sectors, the substantial capital required for technological investments is difficult to secure, making financing costs a critical bottleneck.
Changes in the labour supply structure have further compounded the industry's difficulties. Syrian refugees, who long underpinned labour-intensive segments like sewing and dyeing, are gradually returning home. Meanwhile, Turkey's young domestic workforce shows minimal inclination to enter the textile sector, leading to increasingly acute labour shortages. Externally, the restructuring of global competition has eroded Turkey's traditional advantages. Asian producers like Bangladesh and Vietnam, leveraging lower labour and energy costs, are capturing market share internationally, with substantial orders continuously shifting to these cost-effective regions. Concurrently, Europe—Turkey's core export market for textiles—continues to experience sluggish demand, further intensifying survival pressures on the industry.
Corporate Exodus and Cascading Risks: Transformation as the Sole Path Forward
Under these compound pressures, some Turkish textile enterprises can no longer cover basic production costs, forcing them to exit the sector and pivot towards relatively stable fields like warehousing and logistics. Ahmet Erksuz, Chairman of the Istanbul Textile and Raw Materials Exporters' Association, warns that corporate bankruptcy protection carries significant chain effects. When one enterprise faces difficulties, it impacts numerous upstream and downstream suppliers of raw materials, products, and services. Should bankruptcy protection extend to market liabilities, it would severely disrupt normal trade flows and undermine the continuity of industry operations.
Turkish economist Serpil Tunçer emphasised that the sector currently faces not merely cyclical demand fluctuations, but a structural crisis stemming from the convergence of cost pressures, market dynamics and outdated development models. The traditional competitive approach reliant on labour costs and geographical advantages is no longer sustainable. Against the backdrop of accelerating global supply chain restructuring, transitioning towards high-value-added sectors represents the sole pathway for the industry to overcome its predicament. This entails developing functional and eco-friendly fabrics, alongside small-batch, high-quality production targeting niche markets, thereby re-establishing competitive advantages through enhanced product competitiveness and bargaining power.
Industry analysis indicates that industrial transformation necessitates policy and financial support. On one hand, policies such as medium-to-long-term financing, export credits, and subsidies for technological upgrades are needed to alleviate the financial pressure on enterprises for equipment modernisation and R&D investment. On the other hand, strengthening industrial chain collaboration is essential to promote deep integration between the textile sector and design, branding, logistics, and digital platforms, thereby enhancing industry efficiency and resilience. Presently, Turkey's textile industry stands at a critical juncture of transformation. Whether it can overcome its predicament through systemic reform will profoundly impact the stability of the country's manufacturing and export systems.
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Jiangxi Aihan Textile Co., Ltd. is a professional enterprise integrating garment manufacturing and foreign trade business, demonstrating outstanding strength and rich experience in the textile and garment industry.
Floor 2 .building 1-3 ,Knittingwear Creative Industrypark,No 2099 Guangzhou Road,Qingshanhu district,nanchang.JiangXi,China
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