In the first four months of 2026, core data from China's textile industry presented a 'hot and cold' picture: industrial value-added growth slowed to 4.2%, down 0.8 percentage points year-on-year, yet export delivery value bucked the trend with a 5.1% increase to approximately 320 billion RMB. This contrast suggests that, against a backdrop of incomplete external demand recovery, domestic market weakness is becoming the primary constraint on industry growth.
Domestic Engine Cooling: Retail and Investment Weaken Together
According to publicly available data from the National Bureau of Statistics, retail sales of garments, footwear, hats, and knitwear by enterprises above designated size grew by 2.3% year-on-year in Jan-Apr 2026, down 1.1 percentage points from Q1. This figure not only lags behind the overall growth rate of total retail sales of consumer goods but also reflects that the recovery of end-consumer confidence remains fragile. Regionally, retail performance in traditional textile hubs in East and South China showed divergence, with some second-tier cities even experiencing month-on-month negative growth.
Fixed asset investment data further confirms the industry's wait-and-see attitude. During the same period, investment in fixed assets in the textile industry grew only 1.8% year-on-year, down 3.2 percentage points from the full-year growth rate in 2025. Notably, expansion projects in the eastern coastal areas decreased significantly, while investment in industrial parks in central and western regions, though still positive, slowed from double-digit to single-digit growth. This implies that, facing uncertain market prospects, companies are sharply cutting capital expenditure to prioritize cash flow security.
Export Resilience Behind: Structural Divergence and Price Negotiation
In contrast to weak domestic demand, textile exports showed considerable resilience in Jan-Apr 2026. Customs data indicates that total exports of textiles and apparel reached $78 billion, up 5.1% year-on-year. However, it's noteworthy that growth was mainly driven by chemical fibers and industrial textiles (up 8.3%), while traditional apparel exports barely increased by 2.7%. Behind this lies the upgrading demand from international brands for functional fabrics and fast-response supply chains—Chinese factories are shifting from 'making clothes' to 'making materials'.
Price factors cannot be ignored. Public industry data shows that average export unit prices rose by about 4%, but the price of chemical fiber raw material PTA surged over 10%. This means the 'quality' of export growth is being eroded by costs. For apparel companies focused on OEM, profit margins have been squeezed below 3%, with some small factories facing a 'loss on every order' dilemma.
Profit Squeeze: Divergence Between Upstream and Downstream
From a profitability perspective, in Jan-Apr 2026, revenue of enterprises above designated size in the textile industry grew 3.6% year-on-year, but total profit only increased 0.9%, dragging the profit margin down to 4.1%. Breaking it down, upstream chemical fiber companies benefited from raw material price pass-through, maintaining a profit margin of around 6.5%; while downstream apparel and home textile companies generally had profit margins below 2.8%, down 0.3 percentage points quarter-on-quarter. This 'upstream feasts, downstream starves' divergence is forcing end-user companies to accelerate automation upgrades and design capability building.
Another signal worth attention is finished goods inventory. As of end-April, industry-wide finished goods inventory turnover days reached 22.5 days, up 1.2 days year-on-year. Among these, inventory of grey fabrics and printed/dyed fabrics was particularly high, while inventory turnover for color-woven and functional fabrics was relatively healthy. This suggests to buyers: conventional categories may face greater bargaining space, while differentiated products remain tight.