The prosperity index of China’s cotton textile industry dipped to 48.97 in May, down 0.28 from April. In May, raw material purchasing index was 50.83, up 1.13 over April; the raw material inventory index was at 48.43, edged up 0.21 month-on-month; production index was 50.31, rising 0.43 from April; the product sales index came in at 49.50, up 0.41 over April; the product inventory index was 46.60, down 0.18 from April and the business index came in at 48.25, down 0.41 from the previous month.

In May, the cotton textile industry and downstream industries began to enter a slack season, market prosperity dropped, yarn and fabric inventory increased, but production was unaffected. The transaction of state reserve cotton was 4,11,000 tons, an increase of 7,000 tons over April.

The price of domestic cotton was at a relatively stable level but the prices of cotton yarn and gray fabric kept declining and production-marketing ratio dropped. In June, the market for cotton yarn and gray fabric kept declining. Therefore, the prosperity index of China's cotton textile industry is estimated to go down further.

The prosperity index of China’s cotton textile industry is based on the weighed calculation of numerous main indicators of about 200 backbone cotton textile enterprises. A reading above 50 indicates expansion, while a reading below reflects contraction.