In June 2026, the sentiment index for China's textile and garment professional markets showed subtle shifts. The manager sentiment index edged up 0.43 points to 49.78, while the merchant sentiment index rose 0.34 points to 50.07. Although both indices are near or above the boom-bust line, a deeper dive into sub-indices reveals a picture of uneven recovery.
Foot Traffic Improves, Prices Under Pressure
From the manager side, the logistics volume index and foot traffic index both rose 0.64 points, and the store opening rate index increased 0.32 points, indicating a gradual recovery in market activity. However, the total business volume index remained flat at 49.03, suggesting that increased footfall has not translated into higher transaction volumes. More tellingly on the merchant side: while the sales volume index rose 1.03 points to 50.14, the average selling price index fell 0.22 points to 49.30. The profitability index, though up 0.89 points, still sits in contraction territory at 49.86. This implies merchants are sacrificing margins to maintain sales volumes through price cuts, squeezing profitability further.
Cost and Inventory Squeeze on Two Fronts
The merchant comprehensive cost index edged down 0.19 points to 50.63. While still above 50—indicating decreasing cost pressure—the downward trend is concerning. Meanwhile, the inventory index rose 0.21 points to exactly 50.00, hovering at the threshold. Combined, these data points depict a classic squeeze: costs are rising again, while inventory clearance remains sluggish, putting increasing pressure on merchant cash flow. Industry data shows that in June, 6.99% of merchants reported higher operating costs, a sharp increase of 6.99 percentage points from the previous month. Only 8.44 percentage points more merchants reported inventory reductions, far slower than the pace of cost increases.
E-commerce: The Bright Spot
Amid the pressure, e-commerce indices stood out. The manager e-commerce index rose 0.64 points to 51.61, and the merchant e-commerce index increased 0.35 points to 50.49, both firmly above the boom-bust line. Specifically, 22.58% of market managers reported increased e-commerce sales, up 6.45 percentage points from May; 9.79% of merchants saw e-commerce sales rise, up 8.42 percentage points. This data underscores that online-offline integration is no longer optional but a key survival strategy for market merchants. For those reliant on traditional wholesale stalls, e-commerce capability is becoming a critical differentiator in business performance.
## Diverging Expectations: Managers Cautious, Merchants Optimistic
Forward-looking indicators show a rare divergence. Managers' expectation index for the next period fell 2.91 points to 50.32, and their business environment outlook dropped 1.93 points to 50.97. In contrast, merchants' next-period expectation index rose 0.70 points to 50.84, and their environment outlook increased 0.77 points to 50.84. Managers' caution may stem from concerns about macroeconomic trends and rent stability, while merchants' optimism likely reflects the short-term improvement in June sales. This expectation gap suggests the coming month may see a tug-of-war between macro policy signals and micro-level business sentiment.