The June sentiment index for textile and garment professional markets showed a slight uptick, but this marginal increase masks a deep structural divergence within the industry. According to monitoring data from the China National Textile and Apparel Council's Circulation Branch, the manager sentiment index stood at 49.78, up 0.43 percentage points month-on-month, while the merchant sentiment index reached 50.07, up 0.34 percentage points. While surface-level confidence appears to be recovering, a closer look at sub-indicators reveals a market undergoing a 'fire and ice' adjustment.
Market Slightly Warmer, But Merchant Profits Still in the Cold
From the manager's perspective, overall market operations are stabilizing. In June, 77.42% of professional markets reported flat total operating amounts, and the logistics shipment volume index edged up 0.64 percentage points. The store opening rate and foot traffic indices rose by 0.32 and 0.64 percentage points respectively, indicating a slow recovery in offline traffic. The rental index remained at 50.65, above the boom-bust line, suggesting a relatively stable property-side foundation.
However, merchant-side data reveals deeper concerns. Although the merchant sentiment index jumped to 50.07, the average selling price index fell to 49.30, down 0.22 percentage points from the previous month. The profitability index stood at 49.86, up 0.89 percentage points month-on-month but still below the 50-point threshold. More alarmingly, 18.18% of merchants reported a decrease in sales volume, an increase of 7.22 percentage points from the previous month, while 19.58% saw declining profits, a rise of 8.62 percentage points. This implies that market 'footfall' has not effectively translated into merchant 'profitability,' with price competition intensifying and margins further squeezed.
Costs and Inventory: The Scissors Gap in Business Operations
June data shows a classic 'scissors gap' between costs and inventory. The comprehensive cost index for merchants was 50.63, down 0.19 percentage points from the previous month. Although still above 50, the downward trend indicates rising cost pressure at the margin. Meanwhile, 6.99% of merchants reported increased operating costs, a sharp rise of 6.99 percentage points month-on-month.
On the inventory side, the inventory index was 50.00, up 0.21 percentage points, sitting at the boom-bust equilibrium point. 10.49% of merchants reduced inventory, a proportion increase of 8.44 percentage points. This data suggests merchants are clearing inventory through price cuts or controlled purchasing, but at the cost of lower prices and compressed profits. For small and medium-sized merchants in professional markets, balancing inventory destocking with profit protection will be a core challenge in the coming months.
E-commerce: A Structural Bright Spot in a Gloomy Market
Among all sub-indicators, the e-commerce sales index performed most prominently. The manager e-commerce sales index was 51.61, up 0.64 percentage points month-on-month, while the merchant index reached 50.49, up 0.35 percentage points. Specifically, 22.58% of professional market managers reported increased e-commerce sales, a 6.45 percentage point improvement, and 9.79% of merchants reported the same, an expansion of 8.42 percentage points.
This data indicates that as traditional offline channels struggle for growth, online channels are emerging as a new growth engine for textile and garment professional markets. For merchants, incremental e-commerce sales are partially offsetting the uncertainty of offline foot traffic. This trend has important implications for buyers and foreign trade enterprises in supply chain planning: online product selection and channel management capabilities are becoming key indicators of a merchant's competitiveness.
Divergent Expectations: Managers Cautious, Merchants Optimistic
Forward-looking indicators reveal a clear divergence in market participants' expectations. Managers' expectation for the July sentiment index was 50.32, down 2.91 percentage points from the previous month, and their business environment expectation was 50.97, down 1.93 percentage points. This suggests market management is cautious about short-term recovery, possibly factoring in the summer off-season and uncertain end-consumer demand.
In contrast, merchants' expectation for July sentiment was 50.84, up 0.70 percentage points, and their business environment expectation was 50.84, up 0.77 percentage points. This boost in merchant confidence likely stems from positive feedback from e-commerce channels in June and a phase of easing inventory pressure. This divergence implies that future market dynamics will be more driven by the flexible responses of micro-level merchants rather than macro-level policies or resource allocation.