The textile and clothing industry has undergone very serious changes in Hungary. The size of the garment industry is getting smaller in Hungary, and moving towards the East and the Far East, because of the lower costs in these regions. The Hungarian textile and leather industry face strong competition due to cheap Asian products and the challenges connected to EU accession.   The total value of gross production in the textile & clothing industry was GBP 888 billion in 2004. Out of this, the value of gross production of the textile industry was GBP 342 million and the clothing industry was GBP 547 million. 71% of the products were exported and 29% were sold locally. The value of gross production of the leather and footwear industry was GBP 161 million in 2003.   The number of large companies has decreased in recent years, but there are still over 2,200 textile and clothing companies in Hungary, mainly owned by foreign investors. Currently there are approx. 60 textile & clothing companies employing more than 250 people, and approx. 250 companies employing between 50-250 people. Majority of the companies are small and medium-sized. The textile and clothing industry in total employs 75,000 people.     
The size of the clothing market is steadily growing in Hungary due to an increase in purchasing power, new retail developments and wide product variety. 210 million clothing articles were sold at a value of GBP 941.7 Million in Hungary in 2003.   The global problem - price sensitivity - is present in Hungary. Prices have been depressed by cheap Asian imports. 20% of the clothing and textile market is covered by Chinese products.    
There are market opportunities for European clothing & textile companies in the medium priced quality-clothing segment in Hungary. There are several ways of doing business in Hungary including product sale, contract manufacturing, agents, own stores and joint ventures. The Embassy can offer tailored advice to UK companies about the best way of doing business in Hungary.   Several hundred companies are dealing with the import and whole-sale of clothing, footwear and textile products in Hungary. These companies supply individual retailers, small retail chains and hypermarkets.

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