The Australian Fashion Council’s National Manufacturing Strategy for Australian Fashion & Textiles 2026–2036 (hereafter the Strategy) is the most coherent call to action the textile, clothing and footwear (TCF) sector has seen in a generation. Released in March 2026 and developed in partnership with R.M.Williams through fourteen national consultations with more than three hundred participants, it articulates with exceptional clarity what the sector needs: sustained demand, workforce renewal, and technology adoption at scale (Australian Fashion Council [AFC], 2026). The Strategy names the problem but leaves a structural question unanswered: who builds the infrastructure and how?
It maps four specific convergence points between the Strategy’s priority actions and the hub model, describing research and implementation work currently underway to develop that evidence base.
The Missing Middle, In Regional Form
The Strategy’s most important diagnostic contribution is its identification of what it calls the missing middle: the fibre processing, spinning and advanced garment manufacturing capacity that shifted offshore following tariff removal in the 1980s, leaving Australia exporting premium wool and cotton as raw fibre and reimporting it as finished product at many multiples of the original price (AFC, 2026). Despite generating $7.2 billion in annual export value and contributing $27.2 billion to the national economy, 97 per cent of what Australians wear is manufactured offshore (AFC, 2026; AFC & EY, 2021).
The Strategy proposes to close this gap through demand activation, workforce development and technology adoption.
These levers assume a distributed regional supply base that can be activated — and that base does not currently exist in a form that can support procurement reform, workforce training or technology investment.
Circular textile hubs are a regional-scale answer to the missing middle. They are integrated production facilities that receive post-consumer and post-industrial textile waste streams, sort and reprocess materials, run small-batch manufacturing, provide training and skills transfer infrastructure, and maintain direct relationships with local government and regional industry networks. Rather than operating as a single-function recycler or a single-product manufacturer, they function as managed production partners for their regions; nodes that anchor circular material flows, workforce capability and supply chain relationships within a single facility.
Operational examples of this model exist across Europe and Asia. Facilities in Germany, Italy and Spain demonstrate that design-led circular textile production can be commercially viable at scale, and that the combination of waste processing, manufacturing and training functions generates employment and economic multipliers that neither function achieves alone. What these models also reveal is that viability is highly context-dependent: the policy settings, waste infrastructure, procurement relationships and community engagement strategies that make a hub work in Prato or Berlin do not transfer wholesale to Australia.
Understanding what makes these facilities work, and developing a typology that Australian government, industry and local councils can use when making investment decisions, requires systematic comparative study across different regional contexts.
Four Convergence Points
1. The National TCF Capability Register Needs a Typology First
Priority Action 2 of the Strategy calls for government to fund a National TCF Capability Mapping Project and translate it into a procurement-facing National TCF Capability Register (AFC, 2026). Without visibility of what domestic capability exists and where, procurement reform remains aspirational and supplier discovery almost impossible.
A capability register is only as useful as the taxonomy that underpins it. Definitional work is already underway in the sector. Seamless, Australia’s national clothing stewardship scheme, has developed a draft taxonomy of circular clothing terms through an extended consultation process involving brands, recyclers and reuse operators (Seamless, 2025). This kind of shared language is foundational, and the sector is better placed for having it.
But taxonomy for circular manufacturing capability requires a further layer. The current Strategy framing (mapping capability, capacity, certifications, supply chain linkages and scalability) does not yet account for what makes circular production facilities distinct from linear ones (AFC, 2026). Circular manufacturing capability involves material input diversity, multi-stream processing capacity, end-of-life integration, and governance relationships with waste management systems that sit outside standard TCF classifications.
Developing that layer requires evidence from facilities that are actually doing it. The Green Industries 2025 SA Women in Circular Economies Leadership Scholarship has provided me with the opportunity to undertake this kind of comparative work (albeit at a much smaller scale), building a set of operational descriptors, business model categories and capability indicators grounded in how circular textile hubs function in practice.
The field research, scheduled for late May 2026, will develop and pilot a version of this typology across facilities in Germany, Spain and Italy, with outputs intended for Australian government and industry stakeholders. The Strategy’s 2029 implementation review creates a clear window. The work is timed accordingly.
2. Procurement Reform Needs Verified Regional Nodes to Point At
The Strategy is direct about the scale of the procurement opportunity. Since 2022, seventeen Commonwealth agencies have awarded over $790 million in clothing and uniform contracts, with Defence accounting for 82 per cent of that value (AFC, 2026). The Commonwealth Procurement Rules, overhauled effective November 2025, introduce new Australian-business definitions and SME procurement targets. The Federal Environmental Sustainable Procurement Policy, operative from July 2025, adds sustainability requirements for clothing and textiles. State-level equivalents are following.
Together, these represent a meaningful and sustained shift in demand policy. But demand policy only generates domestic manufacturing investment when domestic manufacturers are visible and verifiable to the buyers whose decisions have changed. That visibility problem is not solved by policy reform alone — it requires measurement infrastructure capable of translating manufacturing capability into procurement-legible evidence.
This is the gap that circular textile hub research directly addresses. Understanding how operational hubs function: what processes they run; what material flows they manage; and what governance relationships they maintain, generates the evidentiary foundation for capability assessment. From that foundation, it becomes possible to develop assessment frameworks that procurement partners can actually use: standardised, defensible and grounded in how circular manufacturing works in practice rather than how it is aspired to in policy documents.
At the UTS Opening up the Fashion Archive Symposium in Sydney earlier this month, I presented work on the FM Circular Fashion IQ Index — a five-pillar scoring framework assessing circular capability across design integration, material sourcing, manufacturing traceability, end-of-life infrastructure and governance (Russo, 2025). The Index was originally developed through the University of Adelaide Venture Catalyst residency and is currently being tested with procurement agencies and brands. The European field research into circular textile hubs will test and refine the typology that underpins it. Circular textile hubs assessed against a framework of this kind become procurement-visible in a way that small manufacturers can rarely become on their own.
3. The Managed Production Partner as the Relational Architecture
The Strategy implies that the commercial model connecting government procurement to regional manufacturers is not transactional but relational. This matters because relational depth is what distinguishes manufacturing businesses that survive economic cycles from those that do not.
I have written elsewhere about the managed production partner model — a mechanism by which an organisation can receive a complex brief, manage trades and tolerances, and deliver a trusted finished outcome to both government and commercial clients. In these scenarios, government procurement plays the role of anchor client, providing relationship depth that becomes a competitive advantage.
A similar model applies to circular textile hubs. A hub that functions as a managed production partner for a council, a state health service, or a uniformed government agency is structurally different from a hub that chases open-market spot contracts. It has:
- revenue stability, which enables workforce investment
- relationship continuity, which enables capability deepening
- procurement visibility, which enables expansion
The Strategy’s demand activation pillar will be most effective where it creates the conditions for managed production partnerships to form — where government agencies commit to multi-year arrangements with manufacturers rather than cycling through short-term contracts that preclude investment in either workforce or technology (AFC, 2026).
4. Workforce Transition Is a Built-Environment Problem
The Strategy identifies an acute workforce challenge. The median age of the TCF manufacturing workforce is 57. Deep technical knowledge in pattern cutting, specialist machinery operation, fibre processing and quality assessment is embedded in a generation that will exit the industry within a decade (AFC, 2026). Without built infrastructure for knowledge transfer, that capability will not be transmitted. It will simply be lost.
Circular textile hubs address this in a way that training programs alone cannot. A hub is a place where people learn how to design and operationalise circular production practices alongside those who already know how. The co-location of skilled practitioners, training functions and live production environments is the design condition that makes intergenerational skill transfer possible.
The premise was tested at a different scale through the Imagine Circular Fashion concept store, a circular textiles activation held at Adelaide Arcade in 2024 and supported through Adelaide Fashion Week and Renew Adelaide. The program brought together retail, hands-on workshops, textile demonstrations and clothing swaps in a single space, exploring whether small-scale local manufacturing, prototyping and design could co-exist with circular economy education and retail in practice. At that scale, the answer was yes.
The activation validated the core model and demonstrated that building awareness and intention around new manufacturing and business models requires more than a communicaitons campaign; it requires a functioning experiential physical environment. The European field research is the next step in that line of inquiry, moving from proof-of-concept activation to evidence-based implementation framework.
The South Australian Reuse Impact Study found that reuse-based operations generate twenty-one times more employment per tonne than recycling (Charitable Reuse Australia & Green Industries SA, 2024). The employment multiplier in hub models derives precisely from the labour-intensive nature of sorting, assessment, reprocessing and small-batch production: activities that are not easily automated and that require skilled human judgement at every stage.
This points to a set of research questions that the European fieldwork will directly address:
- how apprenticeships and skills transfer are structured within operational hubs;
- how knowledge transfer between generations of practitioners is managed;
- the role of regional education providers in sustaining hub capability;
- pathways from hub-scale production to scaled output and export.
These will directly inform the workforce pillar of the AFC Strategy’s Australian implementation.
What the Missing Middle Looks Like
A bold strategy needs visionary implementation and the AFC Strategy names the structural interventions required to do so. What it cannot provide, by its nature as a policy document, is the operational intelligence needed to operationalise those interventions in specific contexts.
That operational intelligence comes from researchers and practitioners who are already working inside the problem. That work will need to be undertaken across four interconnected streams, each of which maps directly onto AFC Strategy priority actions:
Case study site research: Comparative case study analysis of operational circular textile hubs, developing the business model typology and operational framework that Australian implementation needs.
Capability measurement architecture: Exploring procurement-defensible assessment frameworks for circular manufacturing capability to directly support the National TCF Capability Register agenda.
Activation modelling: Design of pilot circular textile hub models adapted to Australian conditions (urban and regional), including managed production partner frameworks.
Policy translation: Conversion of research findings into implementation guidelines, policy briefings and stakeholder frameworks capable of informing the AFC Strategy’s 2029 implementation review.
Framed in this way, the next steps for the Strategy will produce typologies, frameworks, assessment tools, business model templates and pilot experiential environments situated within the Strategy’s own implementation window.
If you are working on the Strategy’s implementation, on state-level TCF manufacturing policy, on regional economic development, or on government procurement reform in clothing and textiles, the conversation is worth having.
Contact: angelina@fleurieumade.com
References
Australian Fashion Council. (2024). Victorian textile, clothing and footwear manufacturing study. Australian Fashion Council.
Australian Fashion Council. (2026). National manufacturing strategy for Australian fashion & textiles 2026–2036. Australian Fashion Council.
Australian Fashion Council & EY. (2021). From high fashion to high vis: The economic contribution of Australia’s fashion and textile industry. Australian Fashion Council.
Australasian Circular Textiles Association. (2022). Opportunities for a circular textile economy in South Australia. Green Industries SA.
Charitable Reuse Australia & Green Industries SA. (2024). South Australian reuse impact study 2023–24: Technical report. Green Industries SA.
Russo, A. (2025). FM Circular Fashion IQ Index: Framework documentation v3. Fleurieu Made.
Russo, A. (2026, March 9). What a shopfitter from Brompton can teach us about the future of Australian fashion manufacturing. Fleurieu Made Blog. https://www.fleurieumade.com/blogs/news/what-a-shopfitter-from-brompton-can-teach-us-about-the-future-of-australian-fashion-manufacturing
Seamless. (2025, October 8). Help shape a set of standard definitions for Australia’s clothing sector. Seamless Australia. https://www.seamlessaustralia.com/news/taxonomy-consultation
Dr Angelina Russo is the founder of Fleurieu Made and developer of the FM Circular Fashion IQ Index. She holds the Green Industries SA 2024–25 Women in Circular Economy Leadership Fellowship and is a 2025 University of Adelaide Venture Catalyst graduate. Her research focuses on circular manufacturing capability, measurement infrastructure and regional textile hub development.