Textile Industry Growth Diverges in Early 2026: Chemical Fibers Lead, Exports Under Pressure, Profit Recovery Still Pending

In the first four months of 2026, China's textile industry delivered a mixed performance. The industrial value-added grew 4.2% year-on-year, fixed asset investment rebounded to 8.6%, but total profits of above-scale enterprises fell 1.9%. This divergence signals a time mismatch between capacity expansion and profitability improvement—factories have invested, but end-demand hasn't caught up.

Chemical Fibers vs. Apparel: Two Extremes in the Chain

By segment, the chemical fiber industry saw value-added growth of 7.5%, well above the industry average, driven by cost support from oil price volatility and inventory restocking by weaving mills. In contrast, apparel value-added grew only 2.1%, reflecting sluggish consumer demand recovery and lingering inventory pressure in domestic channels.

Export data reinforces this divergence. Total textile and apparel exports fell 3.4% year-on-year, with apparel exports down 5.2% while textile exports edged up 0.8%. This suggests foreign orders are tilting toward intermediate goods like yarns and fabrics, while branded garment demand remains constrained by inventory cycles and sourcing shifts in Europe and the U.S.

Investment Boom vs. Profit Squeeze: The Cost of Expansion

Fixed asset investment grew 8.6%, staying above 8% for two consecutive months, indicating sustained business confidence. However, total profits fell 1.9%, and operating costs grew faster (5.3%) than revenue (4.1%), squeezing margins. For small and medium enterprises in weaving and dyeing, this 'revenue growth without profit growth' is particularly painful—facing price hikes upstream and price pressure downstream.

From an industrial cluster perspective, loom utilization rates in Shengze and Keqiao remained above 70%, but grey fabric inventory turnover days extended to over 25 days, indicating poor production-sales linkage. Nantong's home textile base fared better, with bedding fabric orders relatively stable thanks to domestic wedding and seasonal demand.

Retail: Online Growth Can't Mask Offline Weakness

Among total retail sales, apparel, footwear, hats, and textiles grew 3.8%, below the overall retail growth of 4.8%. Online channels performed slightly better, but live-stream e-commerce's low-price strategy further reduced average unit prices, leading to 'volume up, value flat'. For brands and OEMs, this means rethinking channel mix—over-reliance on discount promotions will only erode already thin margins.

Practical Recommendations

For Buyers - Lock in long-term prices for chemical fiber fabrics: Current capacity is ample, but upstream raw material volatility persists. Sign 3-6 month fixed-price agreements with suppliers before end of Q2 to avoid peak-season price hikes. - Monitor apparel inventory clearance opportunities: Some brands face destocking pressure; check spot sales in Nantong or Humen, but inspect goods rigorously to avoid mismatches.

For Exporters - Adjust order mix: Increase the share of textile products (fabrics, yarns) and reduce reliance on pure garment orders. Target markets in Southeast Asia and the Middle East, where demand for chemical fiber fabrics grows faster than in Europe or the U.S. - Optimize cost management: During profit pressure, renegotiate payment terms with logistics and dyestuff suppliers. Use the RMB exchange rate's two-way fluctuation window to lock forward settlement rates, preventing exchange losses from eroding margins.