The increase in the minimum wage and the depreciation of the euro have deepened the crisis in Albania’s garment and footwear manufacturing sector. The industry, which employs around 60,000 people and has for years played a significant role in the country’s export market, is now seeing small and medium-sized factories shutting down.

The closures have also been reflected in declining textile and footwear exports in January, when exports were valued at 8 billion lek, marking a 6% annual decrease.

The garment industry operates with low profit margins and contracts primarily tied to European markets, where prices are determined by global competition. Therefore, any increase in labor costs is immediately reflected in the financial structure of companies.

In January, the minimum wage was 25% higher than in 2024 and 66% higher than in 2021, aiming to increase incomes and improve living standards. However, for manufacturing factories, this rise is translating into strong pressure on costs and competitiveness.

The increase in the minimum wage does not affect only the base salary. It is accompanied by higher social security contributions, insurance payments, and other labor-related costs. For a factory with hundreds of employees, the impact multiplies, making every wage increase a direct burden on the financial balance sheet.

It is worth recalling that textile and footwear exports remain the largest export group in the country, accounting for 30% of the total.