Turkish Textile Industry Faces Deep Crisis as Exports Plunge, Thousands of Factories Shut Down, and Over 300,000 Workers Lose Jobs Amid Rising Costs 28-10-2025

Turkish Textile Industry in Major Crisis: Tens of Thousands of Layoffs and Factory Closures

?? Overview: Once a Global Powerhouse Now in Decline

The Turkish textile industry, long seen as one of the country’s economic cornerstones, is facing one of its most severe downturns in decades. Once a dominant force with a strong global reputation for quality and innovation, Turkey’s share of the world textile market has now dropped below 3 percent—its lowest level in more than 30 years.

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? Declining Exports and Global Competition

Exports have fallen for three consecutive years, with a sharp 6.9 percent drop in the first half of 2025 compared to 2024. Meanwhile, Turkey’s key rivals—Bangladesh and Vietnam—are enjoying double-digit export growth.

This contrast highlights the growing competitiveness gap. While Turkish textiles remain renowned for quality, price sensitivity in the global market now outweighs craftsmanship advantages.

The Economist reports that hundreds of Turkish companies have already relocated operations to Egypt, seeking lower labor costs and favorable exchange conditions.

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? Economic Factors Behind the Crisis

Turkey’s economic stabilization policies—particularly high interest rates and a strengthened lira—were intended to curb runaway inflation, which nearly reached triple digits three years ago. Though inflation has fallen to 33 percent, these same policies have raised labor and production costs, squeezing exporters’ profit margins.

Since 2022, the minimum wage has jumped from 16,000 lira (≈ ₺16,000 ≈ €550) to 26,000 lira (≈ €900), an increase of over 60 percent. For an industry competing on both quality and price, this wage surge has dramatically reduced international competitiveness.

Exporters once benefited from low interest rates and a weaker currency—conditions that made Turkish textiles affordable to European buyers. Now, the opposite is true: high borrowing costs and a strong lira make Turkish goods relatively expensive.

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? Shifting Workforce Dynamics

Over the past decade, the industry relied heavily on migrant and refugee labor, particularly from Syria. Estimates suggest between 250,000 and 400,000 Syrian workers were employed in Turkish textile workshops, often at lower wages. However, as conditions in Syria have improved, approximately 20 percent of these workers have returned home, according to Muzafer Cevizli of the Turkish Wholesalers Association.

Meanwhile, local labor is becoming both more expensive and scarcer. Many younger Turks now prefer office-based jobs over factory work, worsening the shortage of skilled textile workers.

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? European Buyers Turn Toward Asia

European importers—traditionally loyal to Turkish suppliers—are increasingly sourcing from China, Bangladesh, and Vietnam. China, in particular, has expanded its textile exports to the EU by 20 percent in the first half of 2025, partly due to trade diversion caused by higher U.S. tariffs.

According to Mustafa Gültepe, president of the Turkish Exporters’ Assembly, Turkish garments have always been “more expensive but of higher quality” than those from China or India. Unfortunately, in today’s market, slightly higher prices are no longer sustainable even with superior craftsmanship.

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? What’s Next for Turkish Textiles?

Industry leaders believe the future lies not in mass production but in branding, design, sustainability, and fast-delivery niche products. As one source from the sector noted, Turkey must “stop trying to become the China of Europe” and instead focus on high-value, specialized segments.

Some of Turkey’s leading brands—including Eroğlu and LC Waikiki—have already shifted production to Egypt, and more could follow. This trend may mark the end of Turkey’s era as a mass-production textile hub, and the beginning of a transition toward design-driven manufacturing.

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? Summary Table: Turkish Textile Industry Crisis 2025