In the first four months of 2026, the textile industry's ledger was more complex than expected. Industrial value-added grew 3.2% year-on-year, fixed asset investment rebounded to 5.8%, but garment exports fell 2.1%. These three figures paint a picture of domestic demand recovering, external demand contracting, and the upstream chemical fiber sector booming due to raw material price hikes and order front-loading.
Domestic Recovery: Improvement in Consumption and Investment
Retail sales of clothing, shoes, hats, and textiles under the total social consumer goods category grew 4.8% year-on-year, nearly 1 percentage point higher than the 2025 full-year rate. National Bureau of Statistics data shows single-month growth exceeded 5% in both March and April, with April hitting 5.3%. This was driven by recovery in travel scenarios, concentrated seasonal consumption, and e-commerce promotions.
On the investment side, signals were equally positive. Fixed asset investment in the textile industry grew 5.8% year-on-year, accelerating from 3.2% in 2025. Funds flowed mainly into technology upgrades in chemical fiber and dyeing sectors, as well as infrastructure for industrial parks in central and western regions. This suggests companies remain confident in optimizing mid-to-long-term capacity rather than blindly expanding.
Export Pressure: Divergence Between Garments and Textiles
General Administration of Customs data shows China's cumulative textile and apparel exports fell 1.5% year-on-year in Jan-Apr 2026. Specifically, textile (yarn, fabric) exports edged up 0.3%, while garment and apparel exports fell 2.1%. This divergence reflects weak global end-consumer demand, especially in the US and Europe, where destocking cycles are not yet complete.
Order reshoring to Southeast Asia has emerged in some categories. Vietnam and Bangladesh are substituting China in low-end garment processing, while Chinese firms remain strong in functional fabrics and high-value garments. For example, export unit prices of polyester filament and nylon fabrics rose 3%-5%, indicating that quality premiums are offsetting volume declines.
Upstream Raw Materials: Output and Prices Rise Together
The chemical fiber sector was the biggest highlight in the first four months. Output grew 4.5%, with polyester and nylon up 5.2% and 4.8% respectively. Prices rose 6% for polyester filament and 4% for nylon chips, driven by raw material costs like PTA and MEG.
This directly boosted chemical fiber firms' revenue and profit. In Jan-Apr, revenue grew 7.8% and profit jumped 12.3%, far above the textile industry's 0.6% profit growth. However, downstream weaving firms faced cost pass-through pressure, with some small factories' gross margins squeezed below 8%.
Industry Profits: Slight Growth but Widening Divergence
Revenue of above-scale enterprises grew 2.1% year-on-year, while total profit rose only 0.6%. The profit margin stood at about 3.8%, down 0.1 percentage point from a year earlier. The share of loss-making firms rose to 21%, up 2 percentage points from 2025.
This divergence is also regional. In eastern coastal clusters like Keqiao and Shengze, leading firms maintained profit margins above 5% due to stable orders and high automation. In central and western regions, small and medium enterprises faced loss rates exceeding 30%, constrained by logistics costs and product homogeneity.