In June 2026, China's textile and garment specialized market sentiment indices showed a modest recovery, but the underlying data reveals a nuanced picture. The manager sentiment index stood at 49.78, up 0.43 points from the previous month, while the merchant sentiment index was 50.07, up 0.34 points. While the overall trend is toward the boom-bust line, sub-indicators suggest that upstream management and downstream merchants are experiencing different climates.
Market Recovery and Merchant Profit Squeeze Coexist
On the manager side, market operations indeed improved in June. The opening rate index rose 0.32 points to 49.35, and both foot traffic and logistics shipment indices increased by 0.64 points to 49.03. The rental index also edged up 0.33 points to 50.65, indicating stable occupancy rates without large-scale tenant exits. However, the total business volume index remained flat at 49.03, suggesting overall transaction volumes did not expand significantly; the recovery was more about footfall and logistics.
Merchant-side data was more conflicted. The sales volume index rose 1.03 points to 50.14, crossing the boom-bust line, but the average selling price index fell 0.22 points to 49.30. The profitability index, despite rising 0.89 points, remained at 49.86, below the threshold. This means merchants sold more units but at lower prices, squeezing profit margins. 18.18% of merchants reported declining sales volumes, and 19.58% reported lower profits—both proportions increased notably from the previous month, indicating widening operational pressure.
Cost and Inventory: Relief but Caution Warranted
On costs, the comprehensive cost index stood at 50.63, down 0.19 points from May but still above the boom-bust line, suggesting cost pressure eased but did not disappear. Notably, 6.99% of merchants reported higher operating costs, up 6.99 percentage points from the previous month, indicating some are facing rising raw material or labor costs. Meanwhile, the inventory index was 50.00, up 0.21 points, with the share of merchants reducing inventories rising 8.44 percentage points. Inventory destocking made some progress, but overall pressure remains manageable.
For fabric and garment buyers, the current environment of squeezed merchant profits and low selling price indices implies short-term bargaining room may persist. However, they should be wary of lagged cost pass-through. If upstream raw material prices continue to fluctuate, cost pressures may shift to terminal prices in Q3.
E-commerce Stabilizes, Confidence Diverges
A bright spot in June was e-commerce sales. The manager e-commerce sales index rose 0.64 points to 51.61, and the merchant index rose 0.35 points to 50.49. Both are above the boom-bust line, with an expanding base: 22.58% of markets and 9.79% of merchants reported increased e-commerce sales, up 6.45 and 8.42 percentage points respectively. This underscores the accelerating trend of online-offline integration, with e-commerce becoming a vital supplementary channel for market merchants.
Looking ahead, managers and merchants diverge. The manager forward-looking index fell 2.91 points to 50.32, while the merchant forward-looking index rose 0.70 points to 50.84. Managers adopt a cautiously optimistic stance for July, while merchants are more confident, possibly due to anticipated order growth from e-commerce channels.