The latest sentiment monitoring data from the China National Textile and Apparel Council's Circulation Branch shows that the overall sentiment of the national textile and apparel professional markets improved marginally in June, but the recovery is uneven. The manager sentiment index came in at 49.78, up 0.43 percentage points from May, while the merchant sentiment index broke through the 50 threshold to 50.07, up 0.34 percentage points month-on-month. These figures signal a bottoming-out of the market, but a closer look at the sub-indices reveals a stark contrast between the recovery at the management level and the profit pressure on merchants.
Market Operations: Traffic and Logistics Recover
From the feedback of market managers, the operating environment showed positive changes in June. The logistics shipment volume index and foot traffic index both rose from 48.39 in May to 49.03, a month-on-month increase of 0.64 percentage points. This indicates that actual transaction activity in professional markets picked up toward the end of the second quarter. The shop opening rate index also rose 0.32 percentage points to 49.35, suggesting that the wave of store closures is easing. Notably, the e-commerce sales index reached 51.61, up 0.64 percentage points from the previous month and remaining in expansion territory for two consecutive months, suggesting that online-offline integration strategies are injecting new traffic into physical markets.
Merchant Pressure: Volume Up, Price Down
Compared with the moderate recovery in overall market operations, the data from the merchant side presents a more complex picture. The sales volume index rebounded to 50.14, up 1.03 percentage points from the previous month and back above the boom-bust line. However, the average selling price index fell 0.22 percentage points to 49.30, and the profit index was only 49.86, both below the critical threshold. This means merchants sold more goods but at the expense of price and profit. The editorial team notes that 18.88% of merchants reported a decline in selling prices in June, a sharp increase of 12.03 percentage points from May, indicating that price wars are intensifying in both fabric and garment segments.
Cost and Inventory: Pressure Shifts, Inventory Eases
Changes on the cost side warrant caution for buyers. The comprehensive cost index for merchants in June was 50.63, down 0.19 percentage points month-on-month but still above the boom-bust line. Combined with the fact that 6.99% of merchants reported increased operating costs (up 6.99 percentage points from May), it can be inferred that cost pressure is being transmitted from upstream raw materials to downstream merchants. Correspondingly, the inventory index rebounded to 50.00, up 0.21 percentage points, with the proportion of merchants reporting reduced inventory rising by 8.44 percentage points. This suggests that merchants are alleviating cash flow pressure by cutting prices to clear inventory, but this strategy directly erodes profit margins.
Outlook: Confidence Rebounds, July Recovery Expected
Despite the mixed current operating data, market participants' expectations are surprisingly optimistic. Managers' forward-looking sentiment index for the next period is 50.32, while merchants' index is higher at 50.84, up 0.70 percentage points month-on-month. Both business environment expectation indices also remain above 50. This rebound in confidence may stem from anticipation of the traditional peak season in the second half of the year and a partial recovery in foreign trade orders. For fabric and garment sourcing companies, the current period may be a window to negotiate prices and lock in favorable terms.