Professional Market Sentiment Nears Threshold: Textile Distribution Under Pressure in May, E-commerce Growth Slows

In May, the national textile and apparel professional market sentiment indices both fell below the 50-threshold, with the manager index dropping 1.46 points to 49.35 and the merchant index edging up 0.02 points to 49.73. This marks the first time this year that both core indices have entered contraction territory, sending a clear signal of weakening distribution activity.

Key indicators weaken across the board

Among the six sub-indicators of the manager sentiment index, five declined and only one rose. The total business volume index fell to 49.03, while the logistics shipment and foot traffic indices both dropped to 48.39, each down 2.26 points month-on-month. The store opening rate index rose counter-cyclically by 1.61 points to 49.03, but remained below the threshold, indicating limited improvement in market vacancy. The rent index fell 0.97 points to 50.32, barely staying in expansion territory.

On the merchant side, the sales volume index dropped 0.48 points to 49.11, and the profit index fell 0.48 points to 48.97, both in contraction. The average selling price index rose 0.68 points to 49.52, still below 50, suggesting merchants attempted price increases but failed to fully cover cost pressures. The comprehensive cost index rose 1.64 points to 50.82, indicating easing cost pressure, but the inventory index fell 0.55 points to 49.79, meaning inventory pressure increased.

E-commerce growth hits a speed bump

The most notable change was in e-commerce sales indices. The manager e-commerce index dropped sharply by 3.22 points to 50.97, and the merchant e-commerce index fell 0.75 points to 50.14. Although both remain above 50, the growth rate has clearly slowed. Data shows only 16.13% of professional markets reported increased e-commerce sales in May, a dramatic 25.81-point drop from the previous month; on the merchant side, only 1.37% saw e-commerce sales growth, down 8.22 points. This suggests the online channel's role as a growth driver is plateauing.

Forecast indices remain optimistic, but caution warranted

Despite the weak current data, managers and merchants remain cautiously optimistic about June, with the manager forecast index at 53.23 and the merchant forecast at 50.14. However, all four forecast indices declined from April, by 0.34 to 2.58 points. If terminal demand does not recover in June, these indices may slip further.

Industrial impact: lagged effect on upstream production

Professional markets act as a barometer for the textile supply chain. The May decline in total business volume and logistics shipments implies weakening downstream orders. For clusters like Shengze, Keqiao, and Nantong, June and July may see a shortage of new orders. Home textiles, in particular, face higher inventory pressure, which could further dampen restocking demand.

For buyers - Monitor inventory digestion: With the merchant inventory index below 50, market inventory is accumulating, potentially leading to discount sales. Consider delaying purchases until late June or early July to secure better prices. - Leverage e-commerce channels: As e-commerce growth slows, platforms may increase promotions, offering buyers more competitive quotes online.

For foreign trade companies - Beware of mismatch between overseas orders and domestic circulation: If professional markets remain sluggish, it may disrupt production planning and delivery schedules. Maintain close communication with downstream clients and build flexible capacity. - Seize the cost relief window: With the merchant cost index above 50 in May, raw material and operating costs have eased. Use this window to lock in some material purchases and reduce cost risks for the second half of the year.