China's specialized textile and apparel markets are undergoing a mild but structurally differentiated recovery. According to the latest monitoring data from the China National Textile and Apparel Council (CNTAC) Circulation Branch, the manager sentiment index for June 2026 stood at 49.78, up 0.43 percentage points from May, while the merchant sentiment index rose to 50.07, a month-on-month increase of 0.34 percentage points. Although neither index has significantly moved away from the boom-bust line, the directional recovery signal is already clear.
Offline Traffic Recovery and E-commerce Penetration
Breaking down the data, market operation indicators showed positive changes. In June, the store opening rate index rose 0.32 percentage points month-on-month to 49.35, the foot traffic index increased by 0.64 percentage points, and the logistics volume index also recorded a 0.64 percentage point gain. The synchronized improvement of these three indicators suggests that offline footfall and logistics turnover in traditional wholesale channels are recovering from previous lows. About 77% of specialized markets reported total business volume unchanged from the previous month, indicating that the market as a whole is stabilizing at a bottom rather than experiencing sharp fluctuations.
Meanwhile, the penetration of e-commerce channels continues to accelerate. In June, the manager e-commerce sales index reached 51.61, up 0.64 percentage points month-on-month, and the merchant e-commerce sales index also rose to 50.49, a 0.35 percentage point increase. More notably, 22.58% of market managers reported an increase in e-commerce sales compared to the previous month, a proportion that rose by 6.45 percentage points. For large markets that rely on wholesale traffic, e-commerce has evolved from a supplementary channel to an essential infrastructure.
Merchant Profit Squeeze: Widening Gap Between Price and Cost
Despite the overall sentiment improvement, the profit pressure on merchants has not eased simultaneously. The average selling price index for June was only 49.30, down 0.22 percentage points month-on-month, remaining below the boom-bust line for two consecutive months. The profitability index also remained below the 50 threshold, at 49.86, indicating that nearly 20% of merchants experienced a decline in profits month-on-month. Correspondingly, the comprehensive cost index fell 0.19 percentage points to 50.63, meaning more merchants reported rising operating costs.
This scissors gap between falling selling prices and rising costs directly compresses profit margins in the wholesale segment. Industry data shows that in June, 18.88% of merchants lowered their selling prices, a proportion that surged 12.03 percentage points from the previous month; meanwhile, 6.99% of merchants saw increased operating costs, up 6.99 percentage points from May. For wholesale merchants who rely on volume, intensified price competition coupled with rigid increases in raw material and logistics costs creates a double squeeze.
Inventory Relief and Divergent Confidence
Inventory indicators showed positive signs. The merchant inventory index for June stood at 50.00, up 0.21 percentage points month-on-month, with 10.49% of merchants reporting reduced inventory, an increase of 8.44 percentage points from the previous month. Accelerated destocking helps improve merchants' cash flow and frees up capital for autumn/winter stocking.
Forward-looking indicators reveal divergent expectations among market participants. The manager outlook index for July was 50.32, down 2.91 percentage points from May, and the business environment expectation also fell by 1.93 percentage points. In contrast, merchant forward-looking indices rose against the trend, with July sentiment and business environment expectations increasing by 0.70 and 0.77 percentage points respectively, both reaching 50.84. This pattern—managers turning cautious while merchants remain relatively optimistic—may reflect managers' concerns about the pace of macroeconomic and consumption recovery, while frontline merchants are more directly experiencing marginal gains from e-commerce and improved offline traffic.