Textile Market Sentiment Edges Up in June, but Profit and Cost Pressures Persist for Merchants

In June 2026, the national textile and apparel professional market sentiment index showed a modest recovery. The manager sentiment index stood at 49.78, up 0.43 percentage points from the previous month, while the merchant sentiment index reached 50.07, rising 0.34 percentage points. The indices hovered near the 50-point threshold, but sub-indicators revealed structural divergence: operational metrics improved, while profitability remained under pressure.

Market Activity Strengthens, Footfall and Store Openings Improve

From the manager perspective, the total business volume index remained flat at 49.03, but the logistics shipment index and footfall index both rose by 0.64 percentage points to 49.03. The store opening rate index edged up 0.32 points to 49.35, indicating reduced vacancy. The rental index ticked up to 50.65, suggesting landlord confidence. E-commerce sales index hit 51.61, up 0.64 points, showing that online channels are increasingly supporting physical markets.

Merchant Performance Diverges, Price and Profit Under Pressure

Merchant-side data painted a more nuanced picture. The sales volume index rose 1.03 points to 50.14, crossing the threshold, but the average selling price index fell 0.22 points to 49.30. The profit index stood at 49.86, up 0.89 points but still below 50. This combination signals a 'trading volume for price' strategy: sales growth is not translating into profit. Notably, 18.88% of merchants reported lower selling prices, a sharp 12.03-point increase from May, while 19.58% saw profit declines, up 8.62 points. Price competition is intensifying, squeezing working capital for smaller players.

Cost and Inventory Pressures Both Rise

In June, the comprehensive cost index fell 0.19 points to 50.63, indicating slightly higher cost pressure. The inventory index rose 0.21 points to 50.00. Although both indices remain above 50 (meaning cost and inventory pressures are decreasing in absolute terms), the directional changes warrant attention: falling cost index and rising inventory index suggest merchants are replenishing stock while facing rising input costs. Raw material price volatility and logistics cost pass-through are eroding margins.

E-commerce Becomes a Stabilizer

In June, 22.58% of market managers reported increased e-commerce sales, up 6.45 points month-on-month, while 9.79% of merchants saw online sales growth, up 8.42 points. Both manager and merchant e-commerce indices stayed above 50 and trended upward. E-commerce is no longer just a channel for destocking but a vital source of incremental orders. For traditional wholesale merchants, building online capabilities has shifted from optional to essential.

Outlook: Short-term Confidence Diverges, Merchants More Optimistic

Looking ahead to July, managers' forecast sentiment index stood at 50.32, down 2.91 points, with the operating environment expectation index falling 1.93 points to 50.97. In contrast, merchants' forecast sentiment index rose 0.70 points to 50.84, and their operating environment expectation index also increased 0.77 points. This divergence suggests managers are more cautious about macro conditions, while merchants are buoyed by June's sales improvement. The sustainability of the recovery hinges on genuine end-consumer demand rather than intermediate restocking.

Practical Recommendations

For Buyers - Capitalize on the 'volume for price' window during June-July to lock in orders for standard fabrics and accessories at lower prices. - Prioritize markets or merchants with high e-commerce sales indices, as they tend to have faster inventory turnover and more flexible pricing. - For categories where the merchant profit index remains below 50, negotiate extended payment terms, but assess counterparty cash flow risk.

For Exporters - Leverage the uptick in market footfall to increase product displays and client visits at key markets such as Guangzhou Baima or Dieshiqiao Home Textiles. - Monitor RMB exchange rate fluctuations affecting the cost index; consider incorporating price adjustment clauses in order contracts. - Watch for inventory build-up signals; some categories may face short-term oversupply, offering opportunities for discounted procurement for overseas promotions or new market entry.