The textile industry data for the first four months of 2026 reveals a prism of the sector's true colors under multiple pressures. Slowing industrial value-added growth, cooling fixed asset investment, and weakening domestic and export markets all point to a potential contraction cycle. Yet, the counter-trend growth in total profit uncovers deeper structural changes: companies are shifting from scale expansion to efficiency improvement, from low-end volume to high-value-added breakthroughs.
Core Data: Slowing Growth and Profit Resilience
According to operational data released by the Industrial Economics Research Institute of the China National Textile and Apparel Council, from January to April 2026, the industrial value-added growth rate of textile enterprises above designated size fell by about 2 percentage points year-on-year to 4.1%. During the same period, fixed asset investment in the textile industry grew by only 1.8%, a 3.2 percentage point decline from the full-year growth rate in 2025. This deceleration signals that the investment boom driven by capacity expansion over the past two years is receding, with companies becoming more cautious about adding new capacity.
The domestic market also faced headwinds. Retail sales of garments, shoes, hats, and knitwear above designated size fell by 1.5% year-on-year, while total retail sales of consumer goods grew by 2.3%, indicating that textile and apparel consumption significantly underperformed the broader market. On the export front, total textile and apparel exports declined by 0.9% year-on-year, with textile exports falling 1.2% and apparel exports down 0.6%. Weak demand in European and American markets, coupled with intensified competition from Southeast Asian capacity, were the main drivers of export pressure.
However, profit data painted a different picture: total industry profit grew by 7.3% year-on-year, with the profit margin improving by 0.5 percentage points. This suggests that despite slower revenue growth, companies achieved greater earnings resilience through cost reduction, efficiency gains, and product mix optimization.
Category Divergence: Chemical Fiber vs. Fabric
Output growth across sub-sectors showed significant divergence. Chemical fiber output grew by 6.8% year-on-year, leading the industry, driven by strong demand for polyester filament and spandex in sportswear and elastic garments. Yarn output grew by only 1.2%, with cotton spinning enterprises operating at around 70% capacity due to raw material price volatility and fragmented downstream orders. Fabric output increased by a marginal 0.5%, with knitted fabric growth (2.1%) significantly outpacing woven fabric (-0.3%), confirming the substitution trend from formalwear to casual sportswear.
Garment output fell by 1.8% year-on-year, but output of higher-value functional apparel and designer brands grew by 4.3%, indicating that consumption upgrades are reshaping the supply side. In the home textile category, bedding output remained flat, while curtain and upholstery fabric output fell by 2.1%, reflecting the lagged effect of the slowdown in real estate deliveries.
Regional and Policy Dynamics: Uneven Industrial Belt Performance
Regionally, the three major industrial belts—Keqiao, Shengze, and Nantong—showed varied performance. Keqiao, a fabric trading hub, saw a 2.5% year-on-year decline in fabric transaction volume, but chemical fiber fabric transactions grew by 4.1%, demonstrating the positive impact of product mix upgrades on the local economy. Shengze's chemical fiber and weaving capacity utilization rate reached 82%, above the industry average, thanks to local enterprises' early adoption of recycled fibers and functional fabrics. Nantong's home textile market retail sales fell by 1.8% year-on-year, as the impact of live-streaming e-commerce channels pressured traditional wholesale models.
On the policy front, in the first quarter of 2026, the National Development and Reform Commission and the Ministry of Industry and Information Technology jointly issued a document requiring stricter energy efficiency reviews for new textile capacity projects and encouraging digital transformation of existing capacity. Provinces such as Zhejiang, Jiangsu, and Shandong have introduced supporting subsidy policies, offering 15%-20% purchase subsidies for enterprises acquiring intelligent looms and automated dyeing equipment. These policy signals indicate that industry investment will shift from 'volume expansion' to 'quality improvement' over the next two years.