In June 2026, China's national textile and apparel professional market manager sentiment index edged up to 49.78, while the merchant sentiment index climbed to 50.07, both rising by 0.43 and 0.34 percentage points month-on-month respectively. On the surface, the distribution end appears to be emerging from the April-May trough. However, a closer look at the sub-indices reveals an uneven recovery: the average selling price index and profitability index for merchants both remained below the 50 boom-bust line, while cost pressures began to creep up.
A Patchy Recovery
From the manager's perspective, the June total operating volume index remained flat at 49.03 compared to the previous month. Logistics dispatch volume and foot traffic indices both recovered by 0.64 points to 49.03. The store opening rate index rose 0.32 points to 49.35, and the rental index increased 0.33 points to 50.65. These indicators suggest that physical market operations are recovering: more stalls are opening, foot traffic is increasing, and rents remain stable. Yet total operating volume has not grown in tandem, implying that foot traffic conversion efficiency may be low—the market is seeing 'people but not purchases.'
The divergence is more pronounced on the merchant side. The sales volume index rebounded 1.03 points to 50.14, crossing the boom-bust line, but the profitability index stood at only 49.86, and the average selling price index slipped 0.22 points to 49.30. In other words, merchants sold more goods but at lower prices. This reflects passive price cuts driven by weak end-demand destocking: 18.88% of merchants reported lower selling prices, an increase of 12.03 percentage points from the previous month; 19.58% reported reduced profits, up 8.62 percentage points.
The Cost-Inventory Seesaw
A noteworthy signal in the June data is the emergence of cost pressures. The comprehensive cost index fell 0.19 points to 50.63—still above the boom-bust line, but the directional change warrants attention. 6.99% of merchants reported higher operating costs, a proportion that was nearly zero in the previous month. Meanwhile, the inventory index rose 0.21 points to 50.00, with 10.49% of merchants reducing inventory. The simultaneous rise in costs and fall in inventory may indicate that some merchants are proactively compressing stock and controlling capital exposure to navigate an uncertain second half of the year.
This combination of rising costs and falling prices is squeezing middlemen's profit margins. For upstream fabric and yarn producers, the cautious stance of professional market merchants will further transmit upward, manifesting in smaller, more frequent orders—demanding greater flexibility and delivery capability from factories.
E-Commerce: The Only Clear Growth Driver
The brightest sub-index in the June data came from e-commerce sales. The manager e-commerce sales index rose 0.64 points to 51.61, and the merchant e-commerce sales index climbed 0.35 points to 50.49, both in expansion territory. 22.58% of professional markets and 9.79% of merchants reported higher e-commerce sales, with proportions significantly up from the previous month.
This indicates that offline professional markets are accelerating their 'online transformation.' It is not simply about opening online stores, but a full embrace of livestreaming from stalls, mini-program order taking, and private domain traffic operations. For merchants long dependent on walk-in wholesale customers, e-commerce is no longer an option—it is a survival imperative. This trend will force market management to upgrade digital infrastructure, and it also means that buyers' sourcing logic is shifting from 'walking the market' to 'scrolling the data.'
Divergent Expectations: Managers' Caution vs. Merchants' Optimism
The forward-looking indices reveal an interesting divergence: managers' expectations for July declined—the next-month manager sentiment index fell 2.91 points to 50.32, and the next-month business environment index dropped 1.93 points to 50.97. In contrast, merchants' expectations for July improved—the next-month merchant sentiment index rose 0.70 points to 50.84, and the next-month business environment index increased 0.77 points to 50.84.
Managers' caution likely stems from concerns about the pace of macro consumption recovery and the pressure of fixed costs such as rent and labor. Merchants' optimism, on the other hand, is more likely driven by early preparations for the 'Golden September and Silver October' restocking cycle—July is typically the start of autumn/winter fabric order placement, and merchants need to build inventory ahead of downstream demand. This expectation gap means that actual market performance in July will depend on whether upstream raw material prices can stabilize and whether end-consumer confidence materializes.