In June 2026, China's national textile and garment professional market sentiment index edged up 0.43 points to 49.78, while the merchant sentiment index rose 0.34 points to 50.07. Though the headline numbers suggest mild recovery, a breakdown reveals structural divergence: market managers report rising footfall and logistics, but merchants face squeezed selling prices and profits.
Market Side: Traffic and Logistics Recover, but Total Turnover Stagnates
From the manager perspective, the June sentiment improvement was driven by logistics dispatch, footfall, and store opening rates. The logistics index rose 0.64 points, footfall index gained 0.64 points, and the store opening rate index edged up 0.32 points. These indicators suggest that physical market spaces are regaining activity, with more stores opening and pedestrian traffic gradually recovering.
However, the total turnover index remained flat from the previous month at 49.03, still in contraction territory. This implies that despite the increased activity, actual transaction values have not expanded correspondingly. Low conversion rates from footfall to sales may be the real bottleneck. The e-commerce sales index rose to 51.61, indicating that online channels are contributing more, but offline transaction stagnation continues to cap overall sentiment.
Merchant Side: Volume Recovery Fails to Offset Price and Profit Declines
While the merchant sentiment index managed to cross the 50-threshold to 50.07, sub-indices reveal greater pressure. The sales volume index rose 1.03 points to 50.14, signaling some order recovery. Yet the average selling price index fell 0.22 points to 49.30, and the profit index, despite gaining 0.89 points, remained in contraction at 49.86.
This "volume up, price down" pattern is familiar in the textile and garment industry. Weak end-demand combined with high channel inventory forces merchants to trade volume for price. 18.88% of merchants reported lower selling prices, an increase of 12.03 percentage points from the previous month; 19.58% saw profits decline, up 8.62 percentage points. For merchants in fabric, home textile, and garment wholesale markets, margins are being squeezed from both upstream and downstream.
Cost and Inventory: Signals of Shifting Pressures
The cost index fell 0.19 points to 50.63 but remained above the boom-bust line, suggesting overall cost pressure has eased somewhat. However, 6.99% of merchants reported increased operating costs, a jump of 6.99 percentage points from May, indicating growing divergence in individual cost burdens. The inventory index rose 0.21 points to 50.00, with 10.49% of merchants reducing inventory, suggesting some destocking through promotions or adjusted purchasing.
But whether destocking is sustainable depends on the stability of subsequent orders. If selling prices remain depressed, the cash-flow improvement from inventory reduction may be offset by margin erosion.
E-commerce: From Supplement to Stabilizer
The brightest spot in the June data comes from e-commerce. 22.58% of markets reported higher e-commerce sales, up 6.45 percentage points; 9.79% of merchants saw online sales increase, a gain of 8.42 percentage points. Both manager and merchant e-commerce indices returned above the boom-bust line, confirming that online channels have evolved from optional to essential.
For traditional textile clusters like Keqiao, Shengze, and Nantong, e-commerce penetration is reshaping wholesale models. The old reliance on showroom footfall and long-term client relationships is being supplemented by more fragmented, high-frequency online orders. This places new demands on merchants—they must understand not only fabrics but also traffic acquisition.
Outlook: Divergent Confidence for July
Looking ahead to July, manager and merchant confidence diverge. The manager outlook index fell 2.91 points to 50.32, while the merchant outlook index rose 0.70 points to 50.84. This divergence likely reflects different perspectives: managers focus on rents, store opening rates, and logistics efficiency, making them more sensitive to macro conditions; merchants are closer to end orders, and the recent volume recovery gives them more confidence.
Whether this confidence translates into actual profits remains to be seen, given the persistent pressure on selling prices and margins.