Nearshoring still sells—but not at any price, and Turkey’s cost base is drifting out of range.
Turkey remains a top-tier textile powerhouse. Yet its most important customer—Europe—has become a tougher market, just as domestic inflation and currency weakness make production planning harder. The result is a slow bleed of share, plant stress and job losses.
Industry data cited by Turkish exporters show EU imports from Turkey fell 5.1% in 2025, while low-cost Asian competitors gained ground.
Turkey’s near-market advantage is increasingly challenged by cheaper alternatives (Bangladesh, China) and by nearshoring substitutes such as Egypt, where wage costs are markedly lower—prompting some Turkish firms to expand production there.
Turkey’s wider manufacturing backdrop is still weak: the PMI stayed below 50 in January 2026 and input/output prices rose sharply, driven by raw-material costs.
Meanwhile, the lira has hit record lows near 43.7 per US dollar in February 2026, raising the local-currency cost of imported inputs and adding volatility to working capital.
The plausible route is not to “out-cheap” Asia, but to out-specialise it: technical textiles, premium knits/denim, faster replenishment, and compliance-led propositions (traceability, lower-impact processes) that European buyers increasingly price in. Trade policy and targeted support can help at the margin, but the strategic fix is productivity—automation, energy efficiency, and higher-value product mix—so Turkey’s speed and quality remain worth paying for.
