The prosperity index of China’s cotton textile industry was 49.0% in May, indicating a decline of 0.9 percentage points from April this year. Following the release of the “Joint Statement on China-U.S. Economic and Trade Meeting in Geneva”, the macro environment improved. Cotton and cotton yarn prices rebounded, but the market remains in the off-season, and downstream demand recovery is still limited. The prosperity index has risen slightly but stays below the boom-bust line. 

In May, the raw material purchasing index was 49.7%, 2.2 percentage points higher than in April; the raw material inventory index was 48.5%, down 1.4 percentage points month-on-month; the production index was 48.2%, up 0.2 percentage points from April; the product sales index was 48.9%, increasing 2.0 percentage points month-on-month; the product inventory index was 48.6%, down 0.5 percentage points from the previous month; and the business index was 49.4%, up 1.3 percentage points from April.

The prosperity index of China’s cotton textile industry is based on a weighted calculation of numerous key indicators from about 500 core cotton textile companies. A reading above 50% indicates expansion, while below 50% reflects contraction.

Figure: Prosperity Index of China Cotton Textile Industry

Source: CHINA TEXTILE LEADER Express