weighted score 3.9 · ten dimensions
Sourcing Attractiveness Index · ten dimensions
Albania
Labour cost, supply base depth, logistics infrastructure, trade access, and innovation scores for Albania as a sourcing destination.
Labour cost competitiveness
7
Among the lowest labour costs in Europe (~EUR 350/month minimum wage). Competitive for textiles, footwear, and agricultural processing. Emigration constrains workforce availability.
Supply base depth
3
Limited manufacturing depth. Textiles/footwear mainly CMT for Italian brands. Chrome mining. Small agricultural exports. No deep industrial clusters.
Logistics & infrastructure
4
Port of Durres adequate but limited. Short ferry crossing to Italy. Road network improving but gaps remain. Rail freight non-functional.
Workforce skills
4
Low-cost workforce with basic manufacturing skills. Brain drain to EU countries. Youth unemployment elevated. IT outsourcing skills emerging.
Scalability
5
Small economy (~2.8M population). Labour-intensive manufacturing scalable within limits. Workforce availability may constrain growth. EU accession will improve scalability.
Ease of doing business
4
Improving regulatory framework under EU accession. Informal economy (~30% GDP) complicates business. Corruption remains a concern. SPAK anti-corruption progress encouraging.
Trade access & tariffs
4
SAA gives preferential EU access. CEFTA membership for regional trade. No full single market access until EU membership. Rules of origin requirements apply.
Sustainability baseline
3
~100% hydropower is a strong renewable baseline. However, drought vulnerability, waste management challenges, and environmental enforcement gaps lower the overall score.
Innovation & IP
2
Very limited R&D investment. Low patent filing volume. IP framework developing under EU alignment. IT outsourcing is an emerging sector.
Quality standards
3
Progressive EU standards alignment. Conformity assessment developing. ISO certification increasing in export firms. Broader manufacturing quality variable.
Labour & Cost Competitiveness
Labour & Cost Competitiveness
- Wage levels
- Albania has among the lowest labour costs in Europe. Minimum wage is approximately EUR 350/month (2025). This makes Albania competitive for labour-intensive manufacturing, particularly textiles, footwear, and agricultural processing.
- Cost advantage
- Significantly cheaper than EU member states for labour-intensive production. Competitive with other Western Balkan countries (North Macedonia, Kosovo). Proximity to Italy reduces total landed cost for nearshoring.
- Labour market
- Emigration has reduced the available workforce, particularly skilled workers. Youth unemployment remains elevated. Brain drain to EU countries is a structural challenge. Workforce availability may constrain scaling.
Supply Base & Infrastructure
Supply Base & Infrastructure
- Manufacturing base
- Textiles and footwear are the primary manufacturing sectors, largely serving Italian brands through CMT (cut-make-trim) arrangements. Chrome mining and processing. Agricultural products including olive oil, medicinal herbs, and fruits.
- Port infrastructure
- Port of Durres is the main commercial port. Vlora port under development. Port capacity limited compared to major Mediterranean hubs. Ferry connections to Italy (Bari, Brindisi, Ancona) provide short transit times.
- Road infrastructure
- A2 motorway (Tirana-Durres) and A1 (Tirana-Kosovo border) are modern. Road network outside major corridors remains underdeveloped. Rail freight is largely non-functional.
- Energy profile
- ~100% hydropower gives Albania a distinctive low-carbon energy profile. This is increasingly valuable for supply chains with Scope 2 emissions requirements. However, hydropower is vulnerable to drought.
Trade Access & Business Environment
Trade Access & Business Environment
- SAA preferences
- Stabilisation and Association Agreement with the EU gives duty-free or preferential access for most Albanian exports. This is a major competitive advantage over non-preferential origins for EU-bound supply chains.
- EU candidate status
- All six negotiation clusters opened by November 2025. Full EU membership will provide complete single market access. Regulatory convergence with EU acquis is ongoing.
- CEFTA membership
- Albania is a member of CEFTA (Central European Free Trade Agreement), providing preferential access to Western Balkan markets.
- Business environment
- Improving but still challenging. World Bank Doing Business reforms ongoing. Informal economy (~30% GDP) complicates formal business relationships. Corruption remains a concern despite SPAK progress.
Innovation, IP & Quality
Innovation, IP & Quality
- Innovation capacity
- Limited R&D investment and innovation infrastructure. University-industry linkages weak. Patent filing volume very low. Innovation concentrated in IT outsourcing and tourism services.
- IP protection
- IP framework aligned with EU requirements under SAA obligations. Enforcement capacity limited. Counterfeit goods remain an issue in domestic market.
- Quality standards
- Product standards progressively aligning with EU norms under accession process. Conformity assessment infrastructure developing. ISO certification increasing in export-oriented firms.
- IT outsourcing
- Growing IT outsourcing sector leveraging low costs and European time zone. Software development and BPO services are an emerging export category.