China Private Sector Growth Picks Up

The RatingDog China General Composite PMI rose to 52.1 in August 2026 from July's four month low of 50.8, signalling a faster expansion in business activity, although growth remained below the 2026 average so far. Both the manufacturing and services sectors recorded stronger increases in output and new business in August, pointing to a broad-based improvement in operating conditions. Employment also rose for a fourth consecutive month, extending the longest stretch of job creation in more than 5-1/2 years. Meanwhile, input cost inflation accelerated but remained modest, while prices charged for goods and services increased at the slowest pace since January, suggesting limited pressure on final prices despite higher input costs.

The RatingDog China General Composite PMI fell to 50.8 in July 2026 from 53.6 in the previous month, marking its lowest reading since July 2025 and signaling a slower pace of expansion in private-sector activity. The decline reflected weaker momentum across both the manufacturing and services sectors. New business increased for a fourteenth consecutive month but expanded at the slowest pace since March, indicating softer demand. Meanwhile, employment rose for a third straight month, extending the longest run of job growth since mid-2023 and suggesting firms continued to add staff despite moderating activity. On the price front, both input costs and output charges rose at their weakest pace in six months, with inflation easing across the manufacturing and services sectors. The moderation in cost and selling price pressures points to softer inflationary momentum as overall business growth lost steam in July.

The RatingDog China General Composite PMI eased to 53.6 in June 2026 from a three-month high of 54.0 in May. Despite the slight moderation, the latest reading remained among the strongest in the past three years, reflecting sustained expansion across both the manufacturing and services sectors. New business increased for a thirteenth consecutive month, with the pace of growth broadly unchanged from May, underscoring resilient underlying demand. Meanwhile, employment rose for a second straight month, marking the first back-to-back increase in payrolls since mid-2023 and pointing to improving labor market conditions. On the price front, input cost inflation slowed to a five-month low, suggesting easing cost pressures for businesses. However, firms continued to pass on higher costs to customers, with output charges rising at the fastest pace since March 2022, indicating stronger pricing power amid solid demand.