Every year, brand owners, investors, buyers, and journalists ask the same fundamental question about UK clothing manufacturing: is it growing or declining? The honest answer — and the one that rarely appears in a single place — is that both are happening simultaneously, in different parts of the sector, driven by different forces.

UK clothing retail is large and structurally resilient. UK domestic clothing manufacturing is small, structurally challenged, and selectively recovering. Treating them as the same market produces the wrong analysis and the wrong commercial decisions.

This annual report separates the two, documents the data from authoritative sources, and provides the sector outlook for 2026–2027. All figures cited are sourced and dated.

For the operational context — manufacturing costs, lead times, and sourcing decisions — see the Complete Guide to Clothing Manufacturers in UK.

Post Highlights

• The UK fashion and textile industry contributes £62 billion to UK GDP and supports approximately 1.26 million jobs across all activities — design, manufacturing, wholesale, and retail (Source: UKFT / Oxford Economics Industry Footprint Report)
• UK domestic clothing manufacturing (SIC 14.xx) is a distinct and much smaller segment: IBISWorld estimates UK clothing manufacturing sector revenue at approximately £2.6 billion in 2025–26, contracting at a compound annual rate of 2.5% over the five years to 2026
• UK clothing imports in 2024 totalled £14.61 billion — down 7.06% from £15.72 billion in 2023 (Source: ONS via Fibre2Fashion, February 2025)
• UK clothing exports in 2023 totalled £3.77 billion — declining from £3.93 billion in 2022; Q3 2024 exports were £771 million (Source: ONS)
• 88,000 people are employed in UK clothing manufacturing (Source: ONS / UK fashion sector employment breakdown 2024)
• The sector faces three structural headwinds in 2026: cumulative NLW increases (+42.6% since 2021), elevated energy costs (still ~75% above 2021 baseline), and import competition — offset by growing nearshoring demand and the British craftsmanship premium in export markets

UK Clothing Manufacturing Industry — Executive Summary 2026

The UK clothing manufacturing sector in 2026 occupies a paradoxical position: it is contracting in revenue terms while simultaneously experiencing renewed strategic interest from brands seeking shorter lead times, supply chain transparency, and British-origin credentials.

IBISWorld’s January 2026 industry analysis for UK clothing manufacturing (SIC C14.000) shows revenue of approximately £2.6 billion in 2025–26, following a compound annual contraction of 2.5% over the preceding five years. The primary drivers of this contraction are labour cost inflation — the NLW increased from £8.91 in April 2021 to £12.71 in April 2026, a 42.6% rise — energy costs that remain structurally elevated from the 2021–2023 energy crisis, and sustained import competition from Bangladesh, China, Turkey, and Portugal.

Against this, the sector has structural tailwinds that did not exist at the same scale a decade ago. Consumer demand for supply chain transparency is at a documented high — the Made in Britain Buying British Survey 2024 found 56% of UK consumers now recognise the Made in Britain trademark, up significantly from previous surveys. The nearshoring trend accelerated by Red Sea disruptions, US tariff turbulence, and pandemic-era supply chain failures is driving brand reconsideration of offshore-only sourcing models. And the Barclays Brand Britain research documents a real and commercially significant premium in international export markets for British-made clothing.

The sector is not in recovery in aggregate. But within it, manufacturers positioned at the premium end — ethical production, short lead times, Made in Britain certification, transparent supply chain — are experiencing demand conditions materially better than the sector average.

Market Size and Economic Contribution

The distinction between the UK fashion industry and the UK clothing manufacturing sector is essential and frequently obscured in industry commentary.

The £62 billion GDP contribution figure covers the full fashion and textile ecosystem — from fibre growing and textile machinery manufacturing through design, development, manufacturing, wholesale, and retail. UK domestic clothing manufacturing (the factories making garments in the UK) represents a small fraction of this total.

The UKFT / Oxford Economics Industry Footprint Report notes that the sector could support an additional £15 billion in GVA, generate 100,000 more jobs, and contribute £5 billion in tax receipts if it returns to its 2019 size — underscoring both the sector’s potential and the distance from it. (Source: UKFT Industry Footprint Report)

Employment and Workforce Data

The manufacturing employment figure of 88,000 covers those working directly in UK garment production — sewing machinists, pattern cutters, sample makers, production managers, and factory-based QC. This compares to a peak of over 700,000 in UK garment manufacturing employment in the 1970s — structural offshore migration has been the dominant trend for five decades.

The 88,000 figure encompasses a sector dominated by SMEs. 90% of UK fashion retail businesses are micro-enterprises; the manufacturing base reflects a similar structure — the majority of UK CMT factories employ fewer than 50 people. (Source: ONS / Autumn Fair industry analysis 2024)

UK garment manufacturing employment is geographically concentrated: Leicester accounts for the largest regional cluster, followed by East London, Greater Manchester, and West Yorkshire. Scotland provides a disproportionately high share of premium knitwear employment relative to its overall clothing manufacturing headcount.

Production Output and Capacity Utilisation

UK domestic clothing production has declined as a proportion of total UK clothing consumption for decades. The structural shift to offshore production — accelerated through the 1980s and 1990s — means the UK now produces a small fraction of the garments consumed domestically.

Key output indicators:

Revenue trajectory. IBISWorld documents a compound annual revenue contraction of 2.5% for UK clothing manufacturing (SIC C14.000) over the five years through 2025–26, producing an estimated revenue base of £2.6 billion in 2025–26. This contraction reflects labour cost pressure, energy cost elevation, and import competition rather than demand destruction at the brand level.

Textile sector output. Fibre2Fashion / Make UK data indicates UK textile sector manufacturing output dropped approximately 7.7% in 2024 and a further 2.9% in 2025 — reflecting both demand-side pressure (cost-of-living impact on consumer spending) and cost-side squeeze from NLW and energy increases.

Garment manufacturing increase 2010–2020. Prior to the current contraction cycle, UK garment manufacturing saw a 13% increase in the number of manufacturers over the decade to 2020 — a reversal of the long-term decline trend driven by consumer demand for transparency and UK-origin products. (Source: Springfair / ONS industry data 2024)

Capacity utilisation. No comprehensive public data exists on average capacity utilisation across UK clothing manufacturers. Anecdotally, well-positioned CMT factories serving premium brands operate at high utilisation, while commodity-focused manufacturers face greater pressure from import price competition.

UK Clothing Exports and Trade Data

Source: ONS Overseas Trade Statistics via Fibre2Fashion (February 2025 annual summary)

Export performance. UK clothing exports have trended down from the 2021 post-pandemic level. The 2022 peak in imports (£21.20 billion) reflected post-lockdown restocking; the subsequent decline in both imports and exports through 2023–2024 reflects consumer demand normalisation and cost-of-living-driven purchasing caution.

Import composition. UK clothing imports are dominated by China, Bangladesh, Turkey, and India. Bangladesh accounts for the largest single-country share of UK clothing imports and benefits from 0% duty under DCTS. China remains a major supplier across all clothing categories. (Source: ONS trade data)

Export markets. The United States, France, and Germany are the largest UK clothing export destinations by value. The Barclays Brand Britain research (2021) identified a £3.5 billion annual premium revenue opportunity for UK exporters across ten markets based on willingness-to-pay for British-origin goods — with India (11.8% gross premium), UAE (10.9%), and USA (10.4%) the highest-premium markets for British-made clothing.

Trade gap significance. The UK imports approximately four to five times more clothing by value than it exports. This structural gap reflects decades of offshore migration and is unlikely to close materially in the medium term — but the nearshoring trend and premium positioning opportunity create conditions for selective domestic manufacturing growth.

Investment in UK Clothing Manufacturing

Investment data for the UK clothing manufacturing sector specifically is limited in publicly available form — the UKFT Facts and Figures 2024 report (member-only) is the most comprehensive source.

Published figures:

R&D investment 2010–2020. The UK fashion and textile industry invested over £1.4 billion in R&D over the decade to 2020, which UKFT / Oxford Economics reports is now producing gains in sector productivity. (Source: UKFT / Oxford Economics Industry Footprint Report)

Made Smarter adoption programme. The government’s Made Smarter programme provides match-funded grants of up to £20,000 for manufacturing SMEs adopting digital and automation technology. The programme expanded to all English regions in 2025–26, making UK clothing manufacturers eligible across Leicester, Manchester, Yorkshire, and London manufacturing clusters. (Source: Made Smarter / UKFT)

Innovate UK circular fashion funding. Innovate UK’s circular economy funding streams include textile and fashion applications. UKFT members can access guidance on available Innovate UK competitions via the UKFT investment and funding resource. (Source: UKFT / Innovate UK)

Private investment signals. Several UK-based direct-to-consumer brands with British manufacturing credentials have raised private funding in 2023–2025 — reflecting investor appetite for the premium British-made positioning rather than broad sector investment. This is selective, not systemic.

Sector Outlook and Forecast 2026–2027

Headwinds (structural):

The National Living Wage trajectory — two-thirds of median UK hourly earnings as the policy anchor — will continue to drive annual NLW increases in the 3–5% range through 2027. From the April 2026 level of £12.71, the Low Pay Commission’s indicative range for April 2027 suggests a further increase to approximately £13.00–£13.30. For a labour-intensive manufacturing sector, this is the dominant cost driver.

Energy costs remain structurally elevated above pre-2021 levels. Make UK’s 2025 research found 65% of manufacturers say high energy costs reduce their competitiveness. UK industrial electricity prices, while down from the 2023 peak of 28.39p/kWh, remain approximately 75% above the 2021 baseline at around 25.97p/kWh in 2024. (Source: ONS)

Import competition from Bangladesh, Turkey, and increasingly Vietnam and Cambodia remains intense. DCTS zero-duty status for Bangladesh, combined with significantly lower labour costs, creates a structural price differential that UK domestic production cannot close for commodity volume production.

Tailwinds (selective):

Nearshoring demand is accelerating. McKinsey’s State of Fashion 2026 identifies supply chain disruptions — including Red Sea routing impacts adding 10–14 days to Asia–UK transit — and US tariff turbulence as drivers of brand interest in nearshore and domestic production. UK domestic manufacturing is the ultimate nearshore option for UK brands. (Source: McKinsey State of Fashion 2026)

British craftsmanship premium in export markets is documented and commercially significant. The Barclays Brand Britain research identifies a nearly £3.5 billion annual revenue opportunity for British exporters from the premium willingness-to-pay for British-made goods — strongest in India, UAE, USA, and China. UK manufacturers serving brands with export exposure have access to a real price premium. (Source: Barclays Brand Britain Research 2021)

Consumer demand for transparency and ethical production continues to rise. The Made in Britain trademark recognition has risen to 56% among UK consumers (2024 survey). Certified ethical and sustainable UK manufacturers — operating under SEDEX, GOTS, or OEKO-TEX frameworks — are better positioned for brand relationships than those without credentials. (Source: Made in Britain Buying British Survey 2024)

Overall outlook. UK clothing manufacturing as an aggregate sector will continue to contract in revenue and headcount terms through 2026–2027 under the weight of structural cost pressures. Within that contraction, a premium segment — manufacturers with ethical certification, Made in Britain credentials, and capacity for small-to-medium runs — will continue to grow selectively, serving brands whose positioning makes UK production commercially viable at the margin.

The sector is bifurcating. The commodity end will continue to contract. The premium end has structural demand growth. The manufacturers positioned at the right end of that divide are not declining — they are building order books.

For how Silk Routes positions within this landscape as an active UK CMT manufacturer, our manufacturing services page covers our capacity and capabilities. To find out more about Silk Routes, find out more about Silk Routes.

Data Sources and Methodology

This report draws on the following authoritative published sources. Where data gaps exist in public statistics, they are noted rather than filled with estimates.

Primary sources used:

• UKFT / Oxford Economics — The Fashion & Textile Industry’s Footprint in the UK (Industry Footprint Report)
• IBISWorld — UK Clothing Manufacturing Industry Analysis (SIC C14.000), published January 2026
• ONS — UK Overseas Trade Statistics (clothing import and export data, 2021–2024)
• ONS — Business Register and Employment Survey (BRES) — employment by SIC code
• ONS — The Impact of Higher Energy Costs on UK Businesses: 2021 to 2024 (May 2025)
• Low Pay Commission — The National Minimum Wage in 2026 (April 2026)
• Made in Britain Organisation — Buying British Survey 2024
• Barclays Corporate Banking — Brand Britain: Made in Britain Research 2021
• McKinsey & Company / Business of Fashion — State of Fashion 2026
• Fibre2Fashion — UK trade data summaries (ONS data compiled)

Methodology note. The UK fashion industry total (£62 billion GDP, 1.26 million jobs) refers to the full value chain including retail, wholesale, design, and manufacturing. UK domestic clothing manufacturing (SIC C14.000) is a subset — approximately £2.6 billion in revenue and 88,000 employees. These figures should not be conflated. Where third-party analyst estimates are used (IBISWorld), they are identified as such.

FAQ

How big is the UK clothing manufacturing sector?

UK domestic clothing manufacturing (SIC C14.000) — factories producing garments in the UK — has an estimated revenue base of approximately £2.6 billion in 2025–26 (IBISWorld, January 2026) and employs approximately 88,000 people (ONS BRES data). This is distinct from the wider UK fashion and textile industry, which contributes £62 billion to GDP and employs approximately 1.26 million people across all activities including retail and wholesale.

Is UK clothing manufacturing growing or declining?

In aggregate, UK clothing manufacturing revenue has contracted at a compound annual rate of approximately 2.5% over the five years to 2026, driven by NLW wage increases, elevated energy costs, and import competition. Within this aggregate decline, a premium manufacturing segment — serving brands with British craftsmanship positioning, ethical credentials, and short lead time requirements — is experiencing selective demand growth. The sector is bifurcating, not uniformly declining.

What are UK clothing exports worth?

UK clothing exports were valued at £3.77 billion in 2023, down from £3.93 billion in 2022 and a post-pandemic peak of £4.26 billion in 2021. Q3 2024 exports were £771 million, suggesting a full-year 2024 total broadly in the £3.0–£3.3 billion range. The United States, France, and Germany are the largest export destinations by value. (Source: ONS Overseas Trade Statistics)

What is the UK clothing trade gap?

The UK clothing trade gap — imports minus exports — has exceeded £11 billion in recent years. The UK imported £14.61 billion in clothing in 2024 against estimated exports of £3.0–£3.3 billion, reflecting the structural dominance of offshore production in supplying the UK market. This gap has narrowed from the 2022 peak (when imports reached £21.20 billion) due to post-restocking demand normalisation.

What are the main challenges facing UK clothing manufacturers in 2026?

The three primary structural challenges are: labour cost inflation (NLW +42.6% since 2021, with continued annual increases of 3–5% projected); energy costs remaining approximately 75% above 2021 baseline levels despite easing from the 2023 peak; and sustained import competition from lower-cost origins. Secondary challenges include skills shortages in specialist manufacturing roles (pattern cutting, skilled machining), compliance cost burden for smaller factories, and the financing challenge of maintaining cash flow through long customer payment terms.

Citations and Sources

[1]. UKFT / Oxford Economics — The Fashion & Textile Industry’s Footprint in the UK: £62bn GDP contribution; 1.26 million jobs; 260,000 in design, development and manufacturing. https://ukft.org/industry-footprint-report/

[2]. IBISWorld — UK Clothing Manufacturing Industry Analysis (SIC C14.000): revenue ~£2.6bn 2025–26; CAGR -2.5% over five years to 2026. Published January 2026. https://www.ibisworld.com/united-kingdom/industry/clothing-manufacturing/805/

[3]. ONS / Fibre2Fashion — UK clothing imports: £14.61bn in 2024 (down 7.06% YoY); clothing exports: £3.77bn in 2023. Based on ONS Overseas Trade Statistics. https://www.gov.uk/government/collections/uk-overseas-trade-statistics-and-regional-trade-statistics

[4]. ONS — The Impact of Higher Energy Costs on UK Businesses: 2021 to 2024. Electricity peak 28.39p/kWh Q4 2023; ~25.97p/kWh in 2024. https://www.ons.gov.uk/economy/economicoutputandproductivity/output/articles/theimpactofhigherenergycostsonukbusinesses/2021to2024

[5]. Low Pay Commission / GOV.UK — National Minimum Wage in 2026: NLW £12.71 from April 2026; cumulative 42.6% increase from April 2021 (£8.91). https://www.gov.uk/government/publications/the-national-minimum-wage-in-2026/the-national-minimum-wage-in-2026