In May, the value-added of industrial enterprises above designated size grew 4.5% year-on-year, accelerating by 0.4 percentage points from April. The manufacturing sector as a whole grew 4.4%, but the textile industry's 2.6% growth lagged behind both the industrial average and the manufacturing mean, indicating a slower recovery pace.
Background
Data released by the National Bureau of Statistics on June 16, 2026, showed that 28 out of 41 industrial sectors maintained production growth. While the textile industry achieved positive year-on-year growth, its month-on-month momentum remained weak. Compared with the 17% growth in the electronic equipment manufacturing sector, textiles are clearly in the 'slow lane.'
Traditional light industries generally face weak domestic and external demand. Domestic consumption recovery is sluggish, overseas orders fluctuate due to inflation and destocking, and high raw material costs for cotton and chemical fibers squeeze profit margins. Analysts believe this pattern of 'low growth, high costs' is unlikely to reverse fundamentally in the short term.
Industry Impact
Sectoral divergence is intensifying. The strong performance of equipment manufacturing and high-tech manufacturing reflects the direction of industrial upgrading—automation and intelligent production lines are replacing traditional labor-intensive processes. For textile companies, this is both pressure and a signal: without technological transformation, they risk being left behind.
Transition finance policies offer a buffer. Special loans for technological upgrades and green credit targeting traditional industries like textiles are helping companies update equipment and improve energy efficiency. For example, some firms have reduced unit energy consumption by over 15% by introducing high-speed air-jet looms and automatic winders, while improving product quality.
The gradual start of autumn/winter textile orders is seen as a short-term catalyst. Downstream garment brands and traders typically begin stocking in June-July, directly boosting demand for fabrics and yarns. However, the value of these orders matters: high value-added functional fabrics and eco-friendly recycled fiber products yield higher margins, while conventional varieties face fierce competition and price pressure.
Practical Recommendations
For Buyers - Monitor raw material price fluctuations: Cotton and polyester staple fiber have risen slightly recently. Consider locking in forward contracts for autumn/winter orders to control costs. - Prioritize suppliers with green certifications or upgraded technology: These firms tend to offer more stable delivery and quality control, meeting terminal brand ESG requirements.
For Exporters - Diversify market risk: With slow recovery in European and American orders, expand into emerging markets such as Southeast Asia, the Middle East, and Africa, leveraging RCEP tariff benefits. - Enhance product value: Develop functional fabrics with antibacterial, waterproof, or flame-retardant properties, or use eco-friendly materials like recycled polyester and organic cotton to differentiate and avoid price wars.
Overall, the textile industry is in a 'climbing phase.' The 2.6% growth may not be impressive, but combined with policy support and seasonal orders, a moderate improvement is expected in the second half of the year. The key variable is whether companies can seize the window for technological transformation and turn cost pressures into a driver of change.