At EMG, we work with textile manufacturers and brands who are dealing with a lot of change right now. Trade policy shifts, new regulations and technology developments are all happening at once. Some of it creates challenges. Some creates new openings. What matters is how companies respond.
Tariffs sit at the top of executives' concerns for 2026, according to McKinsey's State of Fashion 2026 report[1], while AI adoption and consumer behaviour shifts add to what companies need to manage.
Manage it right, and the opportunities are there. The global textile market hit $1.39 trillion in 2025 and should reach $ 2.01 trillion by 2034[2], so there's growth available for businesses that can adapt. Here are five trends worth watching.
AI stops being optional
Running AI as a pilot project made sense a few years back. Not anymore. Manufacturers now use algorithms for demand forecasting, production scheduling, and quality control. Design teams analyse what consumers respond to rather than making educated guesses based on last season. The technology has become essential.
Job roles have shifted as this happened. Planners and designers use AI tools in their daily work, while many textile producers see it as a business necessity, especially with cost volatility and supply problems putting pressure on margins. Companies treating this as part of operations rather than an innovation experiment are ahead. Agentic AI that can handle complex tasks without supervision will arrive later in the decade and take things further.
Europe tightens sustainability rules
Extended Producer Responsibility schemes make manufacturers accountable for products through disposal. The EU's ban on destroying unsold stock, which McKinsey says was about 21% of output, means brands must rethink production volumes. Overproduction carries real costs now.
Chemical regulations continue to tighten. PFAS bans and microplastic limits force reformulation or material switches, and growing traceability requirements mean brands need to document sustainability claims across supply chains involving multiple countries and suppliers. Compliance is also expensive, but companies acting early can turn these tightening rules to their advantage.
Resale moves into the mainstream
Secondary markets for textiles continue expanding. Rental has moved beyond luxury into regular fashion, consumers view pre-owned differently than they did five years ago, treating it as a smart purchase instead of settling. In responses, brands are launching resale platforms or partnering with existing ones.
This changes product design. An item needs to survive three or four owners and plenty of washes. Chemical recycling breaks textiles down into raw materials for making new fibres, which cuts reliance on virgin materials. Circular models, design-for-disassembly and take-back schemes have all shifted from experimental ideas to standard practice for some companies.
Technical features spread beyond sportswear
Antimicrobial treatments and thermo-regulatory tech used to be sportswear territory. This has changed; you'll find these features in everyday clothes and home textiles now. Technical textiles were worth $252.81 billion in 2025 and are projected to reach $426.71 billion by 2034[3], meaning demand is climbing fast.
What consumers want from textiles has shifted. Smart fabrics monitor health data. Materials regulate temperature based on conditions. McKinsey points out that wellness concerns influence spending more than before, with people choosing products offering tangible functional benefits.
Supply chains stay volatile
Tariffs dominate concerns heading into 2026. US trade policies and geopolitical tensions have textile companies rethinking where they manufacture and how they spread risk. The ‘China+1’ approach means diversifying production into Vietnam, Bangladesh, Mexico and elsewhere rather than concentrating everything in one market.
Nearshoring is picking up, especially in North America where Mexican facilities offer better lead times for US brands. Moving production comes with costs and complications though. Companies need supply chains that can handle it when trade rules change or something else goes wrong, and building that kind of resilience costs more at the start than just finding the cheapest place to manufacture. But when conditions shift – and they will – it's what keeps things running.
Want to discuss how EMG can help communicate your textile innovations? Get in touch with our team.
