Textile Industry Value-Added Grows 2.6% in May: A Weak Recovery Amidst Growing Divergence

In May 2026, the textile industry's value-added grew by only 2.6% year-on-year, trailing the national industrial average of 4.5% and the manufacturing sector's 4.4%. Among 41 major industrial categories, textiles ranked near the bottom, highlighting a notably slow recovery for traditional light industries.

Divergence Behind the Data

Data from the National Bureau of Statistics, released on June 16, showed that industrial output above the designated size increased by 0.40% month-on-month in May, with cumulative growth of 5.4% in the first five months. By sector, equipment manufacturing and high-tech manufacturing performed strongly, with electronic equipment manufacturing surging 17%, becoming the main engine of industrial growth. In contrast, traditional industries such as textiles, chemicals, and building materials grew modestly. The textile sector's 2.6% increase is only about 60% of the manufacturing average.

This divergence is not a short-term phenomenon but a long-term trend of industrial restructuring. High-tech growth benefits from sustained investment in digital transformation, new energy, and semiconductors, while textiles remain mired in overcapacity, weak demand, and rising costs. For buyers, this means fiercer price competition for conventional textiles, while demand for differentiated, functional fabrics may emerge as a new growth area.

Weak Demand as Core Constraint

The sluggish value-added growth directly reflects insufficient end-user demand. Domestically, consumption recovery has fallen short of expectations, with apparel and home textiles markets remaining tepid. Downstream brands have adopted conservative procurement strategies, leading to slow inventory destocking. Externally, global trade growth has slowed, and orders from major markets like Europe and the US have not shown significant recovery, while competition from Southeast Asian textile capacity has intensified.

Cost pressures are also significant. Fluctuations in cotton and chemical fiber raw material prices, coupled with rising energy and labor costs, have further squeezed textile companies' profit margins. Industry data indicate that the textile PPI remained low in May, making it common for companies to experience 'revenue growth without profit growth'.

Policy and Orders: A Turning Point?

Despite short-term headwinds, there are signs of potential improvement. Industry analysts believe that with continued implementation of consumption stimulus policies, industrial technology upgrades, and transition finance support, the textile sector may see marginal improvement in the second half of the year. Autumn/winter textile orders typically peak between August and October, and if both domestic and external demand recover simultaneously, production growth could pick up slightly.

In regional clusters like Keqiao and Shengze, some companies have begun investing in technology upgrades and capacity expansion, reflecting confidence in the long-term market. However, overall capacity reduction is still ongoing, and the survival pressure on small and medium-sized enterprises remains severe.

Practical Recommendations

For Buyers - Focus on suppliers of functional and differentiated fabrics, as these products are less affected by price volatility and have higher demand growth certainty. - Leverage the current low-cycle market to sign medium- to long-term framework agreements with suppliers, locking in lower procurement costs. - Assess delivery risks for autumn/winter orders early and prioritize cooperation with leading companies that have stable capacity and healthy cash flow.

For Foreign Trade Companies - Diversify export markets by increasing efforts in emerging markets such as the Middle East and Africa, reducing reliance on traditional European and US markets. - Utilize trade agreements like RCEP to optimize supply chains, considering setting up assembly or processing links in Southeast Asia to reduce tariff costs. - Monitor RMB exchange rate fluctuations and use tools such as forward settlement to lock in profits, mitigating exchange rate risks that could erode export earnings.