China Manufacturing Growth Tops Forecasts

The RatingDog China Manufacturing PMI eased to 51.8 in May 2026 from an over five-year high of 52.2 in April, but came in above forecasts of 51.4. Growth for new orders and output moderated but stayed robust, supported by domestic demand, new customers and product upgrades, while export orders dipped slightly. Production also rose strongly, among the highest since late 2024. Meanwhile, employment edged into marginal contraction, and supplier delivery times lengthened for a third month, albeit modestly, alongside higher input purchases and six consecutive months of rising input stocks. Inflationary pressures eased, with input and output price increases slowing for the first time in six and seven months respectively, though costs remained elevated due to raw materials, energy and supply disruptions. Business confidence stayed positive but softened, driven by expectations of stronger demand, new orders and capacity expansion.

The RatingDog China General Manufacturing PMI climbed to 52.2 in April 2026 from 50.8 in March, above the expected 51. The latest reading marked the fastest expansion in the sector since December 2020, with output growing at its fastest pace since June 2024. Output expansion was driven by accelerated growth in new orders, which recorded its second-highest growth rate in nearly five years. Employment remained flat, while the backlog of work continued to rise, though at a slightly slower pace than the previous month. Supplier delivery times continued to lengthen as raw material shortages, delivery disruptions, rising input prices, and Middle East tensions weighed on supply chains. Input price inflation accelerated to the highest level in slightly over four years, due to higher raw material and oil prices. As a result, output price inflation rose to its highest level in four and a half years. Finally, business sentiment strengthened amid rising market demand.

The RatingDog China General Manufacturing PMI fell to 50.8 in March 2026 from 52.1 in February, signaling a slowdown in factory expansion and below the expected 51.6. Output and new orders continued to rise, though at a slower pace, with production expanding for the fourth consecutive month. Backlogs increased as demand outpaced production, while employment rose for the third month, marking the longest stretch of job creation since mid-2021. Buying activity continued to expand, lifting input stocks slightly, though finished goods inventories contracted marginally. Supplier delivery times lengthened to the greatest extent since December 2022. Input price inflation surged to its highest since March 2022, while output price inflation hit a four-year peak, driven by rising energy costs amid Middle East tensions. Despite these pressures, manufacturers remained optimistic for production over the next 12 months, supported by stronger demand, capacity investment, and government policies.