In the first five months of 2026, the textile industry's industrial value-added growth rate rebounded by about 2 percentage points year-on-year, pulling the sector out of a year-long low-growth zone. But what truly deserves attention is not the overall recovery, but the cracks within it—chemical fiber and apparel retail sales grew over 7%, while home textiles and industrial textiles grew only around 2%.
Domestic Demand Recovery: Consumption Upgrade or Short-Term Restocking?
According to public data from the National Bureau of Statistics, from January to May 2026, retail sales of garments, shoes, hats, and knitwear above designated size grew 6.8% year-on-year, with apparel up 7.2% and chemical fiber up 8.1%. On the surface, consumer confidence is recovering. But a month-by-month breakdown shows that May's single-month retail growth rate had already fallen 1.5 percentage points from March's peak, suggesting that this round of recovery may be more driven by channel restocking and concentrated holiday consumption than sustained terminal demand expansion.
For buyers, this means more cautious inventory management in the second half of the year. If terminal sell-through fails to keep pace with restocking, Q3 could see inventory buildup and price correction pressure. In markets like Shengze and Keqiao, gray fabric inventory turnover days had risen to 28 days by end-May, up three days from the start of the year, already sending a warning signal.
Export Resilience: Regional Divergence Intensifies
Total textile and apparel exports in the first five months grew 4.2% year-on-year, with exports to ASEAN up 12%, to the EU up 3%, and to the US up only 0.5%. This data clearly outlines the reshaping of global textile trade patterns: Southeast Asian markets are absorbing more direct Chinese textile exports, while European and American markets are constrained by inventory cycles and geopolitical factors, showing weak growth.
Notably, exports of chemical fiber products grew 8.3%, significantly higher than cotton products at 1.7%. This is related to low global petrochemical feedstock prices and reflects the cost advantage of China's chemical fiber supply chain translating into export competitiveness. However, the weakness in cotton product exports is linked to the ongoing impact of the Xinjiang cotton ban and capacity expansion in South Asian cotton spinning.
Investment Divergence: Where Is Money Flowing?
Fixed asset investment data is the most analytically valuable indicator in the entire report. From January to May 2026, textile industry fixed asset investment grew 5.1% year-on-year, but internal differences were huge: chemical fiber manufacturing investment grew 14.2%, apparel and accessories investment grew 4.8%, while textile manufacturing (yarn, fabric intermediate products) investment grew only 1.3%.
This means capital is shifting away from traditional spinning and weaving links toward chemical fiber new materials and terminal brand building. The logic is clear: profit margins in intermediate product links have been squeezed by high cotton prices and fierce homogeneous competition, while high-end products in the chemical fiber sector, such as differential fibers and bio-based fibers, still maintain high margins. For factories, sticking to conventional yarn and fabric production will make order acquisition increasingly difficult.