Despite persistent demand weakness in the first half of 2026, June's textile and apparel professional market sentiment indices sent a nuanced signal: the manager sentiment index edged up to 49.78, while the merchant sentiment index crossed the 50 threshold to 50.07. The monthly increases of 0.43 and 0.34 percentage points may seem modest, but the sub-indices reveal structural adjustments beneath the surface—market operators and merchants are experiencing recovery at different paces.
Market Operations Improve, but Merchant Margins Shrink
From the manager perspective, the June total business volume index remained flat month-on-month, while indices for logistics volume, foot traffic, and store opening rates all rose between 0.32 and 0.64 percentage points. This indicates that the overall operation of professional markets is accelerating, with both people and goods flows picking up against the seasonal summer lull. Notably, the rental index climbed to 50.65, suggesting that market operators have regained some pricing power—often a lagging indicator of revived confidence.
However, the picture for merchants is starkly different. Although the composite merchant sentiment index stood above 50, the average selling price index was only 49.30, down 0.22 percentage points month-on-month, and the profit index was 49.86, still below the boom-bust line. More critically, 18.88% of merchants reported lower selling prices, a 12.03 percentage point surge from the previous month. This means that even as sales volumes recover, merchants are forced to cut prices to clear inventory and win orders, squeezing profit margins further.
Cost vs. Inventory: A Tale of Two Opposing Indicators
One of the most insightful contrasts in June's data comes from the cost and inventory indices. The comprehensive cost index edged down to 50.63 (above 50 indicates easing cost pressure), yet it fell 0.19 percentage points month-on-month, and 6.99% of merchants reported higher operating costs—compared to zero in May. Meanwhile, the inventory index rose to 50.00, with 10.49% of merchants reducing stock, an 8.44 percentage point expansion from the prior month.
These two indicators together point to a clear judgment: merchants are accelerating destocking through price promotions, but at the cost of marginally higher cost pressure. For fabric and apparel buyers, this means short-term bargaining room may still exist, but the profit floor for quality suppliers is approaching, and the sustainability of low-price strategies warrants caution.
E-commerce: The Sole Bright Spot Across All Sub-Indices
Against the backdrop of pressure on traditional channels, e-commerce sales emerged as the only bright spot in June's sentiment data. The manager e-commerce sales index stood at 51.61, up 0.64 percentage points month-on-month, and the merchant e-commerce sales index was 50.49, up 0.35 percentage points. More notably, 22.58% of market managers reported increased e-commerce sales, a 6.45 percentage point improvement from May, while 9.79% of merchants saw e-commerce sales rise, an 8.42 percentage point expansion.
This trend is reshaping the textile and apparel distribution landscape. E-commerce is no longer merely a supplement to offline channels but has become a core engine driving market sentiment recovery. For traditional textile clusters like Keqiao and Shengze, accelerating online-offline integration and enhancing digital operation capabilities have shifted from optional to essential.
Forecast Divergence: Managers Cautious, Merchants Optimistic
Looking ahead to July, managers and merchants offered opposite forecasts. Managers' next-period sentiment index was 50.32, down 2.91 percentage points month-on-month, with business environment expectations also declining. In contrast, merchants' next-period sentiment index was 50.84, up 0.70 percentage points, with business environment expectations rising as well.
This divergence can be interpreted as: managers focus more on the macroeconomic environment and market recruitment pressure, while merchants, buoyed by actual sales recovery in June and optimistic about e-commerce channels, hold a more positive short-term outlook. Nevertheless, both forecast indices remain above 50, indicating that the industry as a whole maintains cautious optimism for the third quarter.