Market evolution: Needle punched carpets (CN 5705) — 2015–2025

Introduction

This report analyses the evolution of EU external trade in carpets and other textile floor coverings classified under CN 5705 — a residual category covering textile floor coverings not classified as knotted, woven, tufted, needle-punched, or felt. Over the 2015–2025 period, the EU market for these products underwent a profound structural transformation: imports nearly doubled in value and more than doubled in volume, while exports remained broadly flat. The result was a dramatic widening of the trade deficit, a sharp increase in import reliance, and a significant shift in supply concentration toward China. At the same time, EU domestic production volumes declined even as production value edged higher, pointing to a shift toward higher-value, lower-volume manufacturing. These dynamics raise important questions about the EU's competitive positioning and supply-chain vulnerability in this product segment.

1. A rapidly widening trade deficit driven by surging imports

The trade balance deteriorated by nearly 200% over the decade

The most striking feature of the 2015–2025 period is the dramatic expansion of the EU's trade deficit in CN 5705 products. The trade balance moved from −€75.0 million in 2015 to −€219.2 million in 2025, a deterioration of 192.4%. This shift was almost entirely driven by the import side: total import value rose by 92.8% (from €153.1 million to €295.2 million), while export value edged down by 2.7% (from €78.2 million to €76.0 million).

The near-doubling of import volumes (in both tonnes and square metres) indicates that the EU's appetite for these floor coverings increasingly outstripped its capacity to produce them domestically or to export competitively.

Import prices fell while volumes surged — a sign of cost-competitive supply

A notable feature of this import surge is that it occurred alongside declining unit prices. The average import price fell from €3,326 per tonne in 2015 to €3,007 per tonne in 2025 (−9.6%), while the price per square metre dropped from €4.48 to €4.13 (−7.7%). This pattern suggests that much of the import growth was driven by cost-competitive suppliers offering products at lower price points than EU manufacturers — a dynamic consistent with rising market share from low-cost Asian producers.

EU domestic production volumes contracted sharply even as values held steady

The production data tells a complementary story. EU production volume (in m²) fell by 26.8%, from 156.3 million m² in 2015 to 114.4 million m² in 2025 — a decline of nearly 42 million square metres. However, production value rose modestly by 1.8% (from €563.3 million to €573.2 million), implying that the remaining EU output shifted toward higher-value or niche segments. The simultaneous decline in volumes and resilience in values suggests that EU producers are retreating from mass-market competition while maintaining a foothold in premium or specialised product lines.

2. China's dominant rise and the growing concentration of EU import supply

China nearly tripled its exports to the EU, consolidating its position as the leading supplier

Among EU import partners, China's growth stands out. Chinese exports to the EU surged by 220.6%, rising from €44.9 million in 2015 to €144.0 million in 2025 — the largest absolute and percentage increase among the top seven partners. By 2025, China alone accounted for nearly half of total EU imports by value, up from roughly 29% a decade earlier.

India, the second-largest supplier, grew more moderately at +30.7% (from €52.5 million to €68.6 million), while the United Kingdom — now a third-country supplier post-Brexit — increased by 29.5%. Smaller suppliers such as Serbia (+124.2%), Pakistan (+118.9%), and Egypt (+88.2%) recorded impressive growth rates, but from much lower bases.

Import concentration rose sharply, heightening supply-chain risk

The Herfindahl-Hirschman Index (HHI) for import concentration increased by 36.8%, from 2,350 in 2015 to 3,215 in 2025. For context, an HHI above 2,500 is generally considered to indicate a highly concentrated market. This rising concentration is almost entirely attributable to China's growing dominance: as Chinese suppliers captured a larger share of EU imports, the diversity of supply sources effectively narrowed. The volume-based HHI rose by a more modest 16.3% (from 3,067 to 3,567), suggesting that some diversification in lower-value segments partially offset the value-side concentration.

Export-side concentration tells the opposite story — a modest diversification

In contrast to imports, export concentration declined. The export HHI fell by 14.6% (from 1,286 to 1,098 in value terms) and by 36.3% (from 1,693 to 1,078 in volume terms). This indicates that EU exports became somewhat more evenly distributed across destination markets. Key shifts include strong growth in exports to the United States (+191.7%, from €4.2 million to €12.2 million) and Türkiye (+328.5%, from €1.2 million to €5.0 million), offsetting declines to the United Kingdom (−36.2%) and Russia (−88.1%).

3. Price shocks, volatility patterns, and the EU's growing import reliance

Price volatility was pronounced across several key trade corridors

The volatility analysis reveals that several trade relationships exhibited significant price instability over the period. On the import side, Pakistan (CV: 1.35) and Indonesia (CV: 1.03) were the most volatile suppliers, while China — despite its market dominance — showed moderate volatility (CV: 0.42). On the export side, Canada (CV: 1.05), Nigeria (CV: 1.14), and the United States (CV: 0.72) displayed the highest price fluctuations, indicating that EU exporters faced considerable pricing uncertainty in these markets.

Three notable price shock events were detected

The shock detection identified three significant events:

The most extreme anomaly was a 52.3% price spike in EU exports to the United States in 2021, with an abnormality score of 432.2 — an exceptionally rare deviation. This may reflect post-pandemic supply-chain disruptions, shipping cost surges, or shifts in product mix toward higher-value goods. A similar magnitude shift was observed in Swiss-bound exports in 2022 (+51.3%), while UK-sourced imports saw a 27.7% price jump in 2021, likely linked to post-Brexit trade frictions and pandemic-era logistics challenges.

Net import reliance quadrupled, signalling a structural dependency

Perhaps the most consequential finding is the dramatic rise in the EU's net import reliance. This indicator — which measures the share of apparent domestic consumption satisfied by net imports — rose from 5.2% in 2015 to 26.7% in 2025, an increase of 417%. In other words, whereas the EU was nearly self-sufficient in this product category a decade ago, more than a quarter of its consumption now depends on net imports. This structural shift is corroborated by the trade intensity index, which nearly doubled from 22.9% to 42.0% (+83.3%), confirming that this market has become significantly more integrated into global trade flows.

The export propensity — the share of EU production exported — grew more modestly from 10.6% to 13.2% (+25.2%), indicating that while EU producers have slightly increased their outward orientation, this has not been sufficient to offset the import surge.

Conclusion

The EU trade market for CN 5705 products has undergone a fundamental transformation between 2015 and 2025. What was once a largely balanced market has become one characterised by a substantial and growing trade deficit, driven primarily by an almost tripling of imports from China. EU domestic production has contracted in volume terms — though not in value — suggesting a retreat toward higher-margin, lower-volume segments. Import concentration has risen to levels typically associated with supply-chain vulnerability, while net import reliance has quadrupled to over 26%.

Several policy-relevant observations emerge:

• China's dominance in this product category warrants attention from a supply-chain resilience perspective, particularly given the rising HHI and the scale of China's market share gains.
• EU producers appear to be adapting by moving up the value chain, but this strategy has not prevented a significant loss of market share in volume terms.
• Post-Brexit dynamics are visible in the UK data: the UK has become a growing import source (+29.5%) even as EU exports to the UK have declined sharply (−36.2%), suggesting that the UK is increasingly sourcing from outside the EU.
• Price shock risks remain elevated, particularly in EU-US and EU-Switzerland export corridors, where extreme price anomalies were detected in 2021–2022.

Going forward, the interplay between EU production strategies, import competition from Asia, and potential trade policy interventions will shape whether this market continues on its current trajectory or whether a rebalancing becomes possible.