As cost rise in China and brands and retailers seek to shorten their supply chains Portugal has reinvigorated itself as an important sourcing option for non-European companies.  Prior to 2013 the EU market dominated Portugal’s textile and apparel exports with Spain, France and Germany taking over half of all exports.   In 2017 textile and apparel exports increased to 5.063 billion Euros which was just below the record set in 2001. The industry has gone through a transformation from lowest cost provider to a medium cost higher quality sourcing option. In 1990’s Portugal was known as the “China of Europe”  and in 1999 it joined the EU.  While Europe remains its largest market due to proximity exports to the US have been increasing, exports to the US expanded 19.13% in 2017 reaching 427.318 million USD with cotton products accounting for 245.08 million USD of that total reflecting a growth of 21.9%.

Their largest textile business remains in home textiles, a business the country which has a rich history and for which it is known for quality. Exports of cotton towels and bedding to the US reached 95.119 million USD in 2017 representing steady growth. Apparel exports in cotton have been limited to the US and focused on women’s and men’s knit shirts and blouses. Portugal is a small producer compared to Turkey which had apparel and textile exports in 2017 near 30 billion USD.  The industry is concentrated in the extreme northern part of the country in the regions of Braga and Porto. Cotton is an important part of the industry but consumption is small at 155,000 bales.

As a member of the EU Portugal has labor regulation and higher cost, however, the average labor cost is still much cheaper than the major EU states and was below that of Greece in 2016. The former Eastern European countries have cheaper labor rates.  Portugal’s minimum wage is currently 557 Euro (684 USD) a month and at such a low rate the country is only slightly more expensive than Turkey and below many Chinese locations.