Domestic mills are facing a double blow: collapsing output and market share losses to imported finished goods, even as purchases of industrial inputs fall sharply.
Argentina’s textile industry has entered a deeper contraction phase, with production, capacity use and employment all weakening as imports of finished garments gain ground. According to the Argentine Textile Industries Federation (FITA), the textile industrial production index fell 23.9% year on year in January 2026, the weakest reading in the series dating back to 2016. That compares with a much smaller 3.2% decline in Argentina’s overall manufacturing output, underlining the sector’s disproportionate stress.
The production collapse is feeding directly into plant utilization. Industry sources cited in the uploaded report say the sector was operating at just 24% of capacity in January, against an economy-wide industrial average of 53.6%. The same report says textile, apparel, leather and footwear activities shed 12,000 formal jobs over the past year, leaving total formal employment at around 100,000 by December 2025.
Imports are rising where domestic production is falling
The structural split is stark. FITA says imports of finished apparel rose 82% in volume and 53% in value in the first two months of 2026, while imports of production inputs such as yarns, fabrics and raw materials fell by more than 35% in volume and more than 50% in value. That pattern suggests local factories are buying fewer inputs because they are producing less, while domestic demand is increasingly being met by imported finished goods.
Additional reporting points to the same trend. Buenos Aires Herald reported that garment imports in January alone rose 129% in quantity and 91% in value year on year, while industry groups linked the broader slump to trade liberalization and intensifying competition from foreign platforms and products.
E-commerce is accelerating the shift
The report also highlights how online retail is changing the competitive landscape. In Argentina’s latest annual e-commerce study, 47% of online shoppers said they had purchased from overseas platforms, with Temu and Shein among the most used. For domestic apparel brands and SMEs, the result is weaker sales, shrinking market share and mounting price pressure.
The key question now is whether the sector’s slump remains cyclical or becomes structural. With factories underutilized, formal jobs disappearing and import penetration still rising, Argentina’s textile industry is increasingly fighting for survival rather than growth.
