China Factory Activity Shrinks Less Than Expected

China’s official NBS Manufacturing PMI increased to 49.8 in August 2026 from 49.2 in the previous month, surpassing market expectations of 49.7. It was the second consecutive month of contraction in factory activity, amid persistently weak domestic and external demand and extreme weather conditions. Output returned to expansion (50.4 vs 49.9 in July), while new orders also expanded after contracting in the previous month (50.6 vs 48.5), with new export orders also returning to expansion (50.1 vs 49.6). However, employment remained subdued (48.7 vs 49.0), while purchasing activity returned to expansion (50.5 vs 49.4), and supplier delivery times shortened for the first time in seven months (50.1 vs 49.5). On the price front, input cost inflation accelerated to a three-month high (56.6 vs 53.2), while output prices rose after falling in the previous month (50.4 vs 47.8). Business sentiment weakened to its lowest level in five months (53.8 vs 54.1).

China’s official NBS Manufacturing PMI unexpectedly declined to 49.2 in July 2026 from 50.3 in the previous month, below market expectations of 50.0. It was the first contraction in factory activity since February, amid persistently weak domestic and external demand and elevated production costs. Output shrank for the first time in five months (49.9 vs 51.4 in June), while new orders contracted after expanding in the previous month (48.5 vs 51.2), with foreign orders also returning to contraction (49.6 vs 50.1). However, employment remained subdued (49.0 vs 48.5), while purchasing activity returned to contraction (49.4 vs 51.4) and supplier delivery times lengthened further (49.5 vs 49.9). On the price front, input cost inflation eased but remained elevated (53.2 vs 54.2), while output prices fell by the most in nine months (47.8 vs 48.2). Finally, business sentiment weakened slightly (54.1 vs 54.3).

China’s official NBS Manufacturing PMI increased to 50.3 in June 2026 from 50.0 in the previous month, surpassing market expectations of 50.1. It was the third consecutive month of expansion in factory activity so far this year, supported by strong high-tech manufacturing exports linked to the AI boom, even as shipments of other goods remained weak alongside subdued domestic demand. Output growth accelerated (51.4 vs 51.2 in May), while new orders expanded after contracting in the previous month (51.2 vs 49.9), with foreign orders also returning to expansion (50.1 vs 48.6). However, employment remained subdued (48.4 vs 48.6), while purchasing activity returned to expansion (51.4 vs 49.8) and supplier delivery times lengthened, albeit at a slower pace (49.9 vs 49.2). On the price front, input cost inflation eased to a six-month low (54.2 vs 60.5), while output prices fell for the first time in six months (48.2 vs 51.9). Finally, business sentiment strengthened slightly (54.3 vs 53.9).