Textile plants in Mexico's traditional manufacturing hubs are operating at just 20% to 30% of capacity, according to Jorge Castellanos, President of Intermoda, Mexico's leading fashion trade event. He named Puebla, Tlaxcala and Jalisco as the states hit hardest by underutilization.

Castellanos attributed the collapse largely to an influx of low-priced fabrics from China and Vietnam, which has distorted the domestic market and pushed local designers and garment manufacturers toward imported raw materials. He delivered the assessment during the 84th edition of Intermoda.

The sector still carries real weight. Mexico's textile manufacturing market was valued at approximately US$15 billion in 2024, with a projected compound annual growth rate of 3% to 4% through 2033. The industry supports more than 350,000 industrial jobs across the supply chain. Fashion apparel accounts for nearly 60% of total sector value, and polyester represents about 40% of fiber consumption.

What is the sourcing response?

Intermoda is leading an initiative to reorient the origin of textile imports toward South America, integrating suppliers from Colombia, Peru, Chile and Brazil into Mexico's value chain. The strategy responds both to Chinese and Vietnamese fabric competition and to recent changes in Mexico's tariff policy, which have tightened conditions for countries without free-trade agreements.

The goal is to secure a stable supply of higher-quality inputs for domestic manufacturers while complying with a more restrictive trade environment.

What happens to the 'Hecho en México' seal?

The "Made in Mexico" label remains a central pillar of the recovery strategy. Industry officials acknowledge, however, that preserving its integrity in the short term will require flexibility on imported fabrics — provided they are transformed into higher-value finished products within Mexico.

That condition frames the compliance question for buyers: the label's value now depends on documented downstream transformation on Mexican soil, not simply on country of origin at the fabric tier.

Can Plan México recover the lost jobs?

The federal government has designated textiles and footwear as priority sectors under Plan México, its strategy to modernize traditional industries and integrate them into North American supply chains. The plan targets the recovery of approximately 50,000 jobs lost in recent years through multi-billion-dollar investments in technology and the formalization of small and medium-sized enterprises.

Industry specialists argue the path forward runs through reactivating underused machinery and reinvesting in local fabric production. They view the current geopolitical environment and accelerating nearshoring trends as a rare opening for Mexico's garment sector to capture regional demand.

What sourcing decisions does this force?

The industry's future is no longer framed around mass-produced basics. The focus has shifted to premiumization and specialized textiles.

"The success of the Mexican clothing industry is not in competing on price with basic products from the East, but in differentiation through added value," Castellanos said.

To support the transition, textile chambers are expected to define roadmaps to modernize facilities, improve logistics efficiency, and meet growing North American demand for sustainable, high-quality fashion.

For sourcing managers, the decision is concrete: Mexican suppliers with idle capacity are available now at scale, but competitive engagement will mean specifying higher-value, differentiated product and building fabric inputs from South American partners rather than defaulting to Asian commodity cloth.