In the first four months of 2026, China's textile industry data send a clear signal: growth engines are shifting from external to domestic demand, but the latter's driving force has not yet fully unleashed.
Investment and Production: Expansion Intent Remains but Divergence Emerges
According to publicly available data from the National Bureau of Statistics, the textile industry's value-added output grew 5.8% year-on-year in Jan-Apr 2026, slightly down 0.3 percentage points from the same period last year, yet still within the medium-high range of the past three years. Fixed-asset investment increased 9.2%, with chemical fiber investment leading at 12.5%, reflecting sustained spending on capacity upgrades and new material R&D upstream.
On the output side, chemical fiber production rose 7.1% year-on-year, while yarn and fabric output increased 3.2% and 2.9%, respectively. Notably, the substitution effect of chemical fibers for cotton continues to deepen, driven both by cotton price volatility and growing demand for functional fabrics downstream. For buyers of greige fabrics, this means supply stability of chemical fiber fabrics is better than cotton, but price elasticity is also greater.
Retail: Apparel Consumption Slows, Home Textiles Hold Resilience
In total retail sales of consumer goods, the category of garments, shoes, hats, and knitwear grew 4.1% year-on-year, down about 1.5 percentage points from the full-year 2025 growth rate. April's single-month growth was only 2.3%, hitting a 12-month low. Online channel growth also slowed, though its share rose to 38.7%.
Home textiles performed relatively steadily, with retail sales up 6.8%, led by bed linen sets and towel products. This is supported by 'self-pleasing consumption' and 'improved living' demand, but given the lag effect of real estate completion data, the sustainability of home textile retail growth in H2 is uncertain.
Exports and Profitability: Volume Stable, Price Falls, Margins Squeezed
Customs data show that textile and apparel exports fell 2.1% year-on-year in Jan-Apr 2026, with textiles (including yarn, fabric, industrial fabrics) down 1.4% and apparel exports down 2.8%. Export volume was roughly flat, but average export prices dropped about 3.5%, indicating strong price pressure from overseas buyers and direct competition from Southeast Asian rivals on low-cost orders.
Industry operating revenue grew 3.6% year-on-year, but total profits increased only 0.7%, with profit margins falling to 4.2%, the lowest for the period in five years. On the cost side, chemical fiber raw material prices rose 4.3%, labor costs increased 5.1%, while the ex-factory price index (PPI) for finished goods only rose 1.2%, widening the cost-price scissors gap. This means large-scale enterprises can maintain profitability through capacity utilization, but SMEs face greater challenges in cash flow and order turnover.
Industrial Cluster Reactions: Order Structure Shifts in Keqiao and Shengze
Regional data show that Keqiao China Textile City's transaction volume grew 5.1% year-on-year in the first four months, but the share of foreign trade orders dropped from 35% to 28%, while domestic orders rose to 72%. In Shengze, loom operating rates remained around 78%, but orders for differentiated products (e.g., recycled fiber fabrics, cationic fabrics) are already scheduled into late June, while inventory turnover for conventional polyester taffeta and pongee increased to 45 days.
This 'dumbbell-shaped' divergence in order structure—strong demand at both the high-end differentiated and low-end volume ends, with conventional products stuck in the middle—is becoming the most typical feature of the current fabric market. For buyers, this means greater bargaining power on conventional fabrics, but they must guard against suppliers lowering quality standards to clear inventory.