Output rose 4.24%, but profits plunged 16.10%. China's printing and dyeing industry delivered a bittersweet report card for Q1 2026. While production and exports both grew, a double-digit profit decline exposed a harsh reality: the sector is trading volume for margin, with cost pressures largely unable to pass downstream.
Output and Exports: Growth with Underlying Worries
National Bureau of Statistics data shows output of printed and dyed fabrics by above-scale firms rose 4.24% year-on-year in Q1, accelerating 3.32 percentage points from the full-year 2025 pace. The main driver was recovering end-consumer demand: per capita clothing consumption spending increased 5.6%, and retail sales of garments, footwear, and textiles by units above designated size grew 9.3%.
Exports also posted gains. China Customs data indicates total export value of printed and dyed fabrics reached $16.431 billion in Q1, up 2.91% year-on-year. Woven fabric export volume rose 8.94% but unit price fell 6.32%; knitted fabric export volume increased 8.11% while unit price dropped 3.60%. The pattern of volume growth with price decline persisted, reflecting intensified global competition.
Performance varied sharply across major trading partners. Exports to Vietnam and Bangladesh fell 4.16% and 2.03% respectively, while those to Russia, Pakistan, and India achieved double-digit growth. The ASEAN market as a whole grew only 0.01%, far below the industry average.
Profit Squeeze: Between High Costs and Weak Demand
Operating results deteriorated markedly in Q1. Revenue of above-scale firms fell 2.62% year-on-year, while total profits plunged 16.10%. Among 2,036 above-scale printers and dyers, 895 were in the red, a loss ratio of 43.96%.
Cost pressure was the main culprit. Middle East conflict pushed up oil prices, driving PET prices sharply higher and raising grey fabric costs. Meanwhile, prices of dyes and auxiliaries also rose significantly. But with overall end-demand weak, fabric traders were cautious in placing orders, leaving mills unable to pass on costs.
Operating efficiency declined. Finished goods turnover fell 6.08%, accounts receivable turnover dropped 4.53%, and total asset turnover decreased 4.24%. The ratio of three expenses rose to 8.21%, indicating greater cost-control pressure.
Outlook: Short-Term Pain, Long-Term Hope from Domestic Demand
Looking ahead to Q2, uncertainties remain abundant. The effects of high energy prices, rising trade costs, and demand contraction will further materialize. Easing Sino-US trade tensions may provide some relief, but the supply-demand imbalance is unlikely to reverse fundamentally in the near term.
On the positive side, China's 'expanding domestic demand' policies continue to gain traction. As consumer spending power and confidence gradually recover, the vast domestic market will serve as a stabilizer. Textile and apparel consumption is moving toward diversification and personalization, demanding higher quality and variety in fabrics.