The China Cotton Textile Association recently released the China Cotton Textile Industry Prosperity Report for August 2026, concluding that the market recovery had fallen short of expectations and that the strength of the traditional peak season remained to be seen.

China’s cotton textile prosperity index edged down. The China Cotton Textile Prosperity Index stood at 49.6% in August 2026, below the critical threshold and 0.1 percentage points lower than in July. The cotton textile market experienced a marginal recovery in August, with downstream orders gradually picking up from mid-month. However, rising raw-material prices made downstream buyers reluctant to accept higher costs, and downstream activity remained generally subdued, leaving the prosperity index in contractionary territory. Of the seven sub-indices that make up the overall index, the raw material procurement, product sales and enterprise operations indices were above the threshold; all the others remained below it. The raw material procurement, product sales and business confidence indices rose from July, while the other indices declined.

Source: China Cotton Textile Association

In August, the raw material procurement index stood at 51.1%, above the critical threshold and up 0.9 percentage points from July. The raw material inventory index was 48.7%, below the critical threshold and down 0.2 percentage points from July, indicating a decline in stocks of major industry raw materials. The production index stood at 49.7%, below the critical threshold and down 0.4 percentage points from July, indicating lower textile mill output than in the preceding month. The product sales index stood at 50.6%, above the critical threshold and up 0.4 percentage points from July. The finished product inventory index was 49.3%, below the critical threshold and down 0.9 percentage points from July, indicating an increase in textile mills’ finished-product inventories. In August , the enterprise operations index was 50.1%, above the critical threshold but down 0.7 percentage points from July. Market orders and product shipments improved somewhat at the margin, but downstream demand remained generally subdued, new orders were weak and improvements in textile mills’ operating conditions were limited. The business confidence index stood at 46.7%, up 0.9 percentage points from July but still below the critical threshold. Although market conditions improved marginally during the month, overall activity remained subdued, the recovery fell short of expectations, and uncertainty about the outlook persisted. Most enterprises therefore maintained a cautious wait-and-see stance, and the true strength of the traditional peak season remained uncertain.

Note: The China Cotton Textile Prosperity Index is compiled using observations from nearly 500 cotton textile mills across the country. Following an approach similar to that used for China’s official manufacturing PMI, the index is calculated as a weighted average of several key indicators. A reading above 50 indicates better operating conditions than in the preceding month; a reading below 50 indicates deterioration from the previous month.

Source: CHINA TEXTILE LEADER Express