ANKARA, April 25 (Xinhua) -- Textile companies in Türkiye have been relocating some production abroad amid rising costs and growing global competition, a trend that has triggered mixed reactions from industry insiders.

While some have called the shift a strategic realignment rather than a wholesale decline for the textile sector, a cornerstone of Türkiye's exports, others have voiced concern over more job losses and factory closures in the sector.

According to the Türkiye Exporters Assembly (TIM), textile and raw materials exports dropped 0.6 percent in 2024 from 2023, recording 9.5 billion U.S. dollars.

In particular, ready-to-wear exports fell 7 percent to 17.9 billion dollars, and leather goods exports plunged nearly 18 percent to 1.5 billion dollars.

Thousands of workshops and small businesses in the country, especially in the central Anatolia area, have either scaled down or shut their doors entirely, the TIM said.

Data from the Turkish Statistical Institute showed that the textile workforce in Türkiye dropped from 1.25 million in 2022 to under 950,000 by the end of 2024.

Türkiye has been grappling with rising inflation for years. From June 2023 to March 2024, the central bank raised its key interest rate from 8.5 percent to 50 percent to tighten monetary policy and stepped into an easing cycle at the end of last year, supported by improving inflation indicators.

However, the central bank reversed the easing cycle last Thursday by raising its benchmark interest rate to 46 percent from 42.5 percent, as authorities moved to curb renewed inflationary pressures and stabilize financial markets.

Amid prolonged high inflation and labor costs, some Turkish textile companies started to turn to overseas manufacturing, choosing countries like Egypt as an alternative, given their more favorable investment climates and lower labor costs.

According to data released in early 2025 by the Egypt-Türkiye Business Council, more than 200 Turkish textile companies launched operations in Egypt in 2024.

"Operating costs in Türkiye have increased drastically in recent years. Minimum wages have also more than doubled in a few years," Emine Karatas, production manager of Istanbul-based medium-sized apparel firm ModaNova Textiles, told Xinhua.

Referring to the partial relocation of ModaNova Textiles' production to Egypt recently, Karatas said, "Egypt offers a cost structure that allows us to fulfill large-volume orders while maintaining our creative and administrative operations here in Türkiye."

"This is not the first time our sector has faced turbulence. We experienced challenges in the past ... We're rebalancing," she said.

"This is not about abandoning Türkiye," said Hasan Tansel, a manager from Turkish denim producer Denim Pro, which is based in western Türkiye's Aydin province and has recently invested in new facilities in Egypt.

"We are diversifying. Our high-end and custom lines remain in Izmir (western Türkiye), where we can better oversee quality and design," he told Xinhua.

As the labor-intensive part of the textile sector is migrating, branding, design, and innovation are what Turkish textile companies need to focus on now, as these areas will keep the sector competitive in the long term, Ramazan Kaya, president of the Turkish Clothing Manufacturers' Association, told Turkish online economic news portal Ekonomim recently.

Meanwhile, industry insiders like Seref Fayat, from the clothing and apparel section at the Ankara-based Union of Chambers and Commodity Exchanges of Türkiye, are not very optimistic about the textile sector's future.

"We expect a new drop in exports this year. Investment is slowing, and economic stagnation in Europe, one of our main export destinations, isn't helping," Fayat told Xinhua.

"It could have lasting consequences for the domestic supply chain," Fayat said, noting that further job losses and factory closures could follow unless effective policy measures are taken.