China Factory Activity Hits 3-Month Low

The RatingDog China Manufacturing PMI increased to 51.5 in August 2026 from July’s four-month low of 50.9, surpassing forecasts of 51, as output and new orders rose at faster paces. New orders rose for the fifteenth consecutive month, the longest period of growth since 2018, supported by the fastest rise in foreign sales in six months. Output grew for nine consecutive months, with the latest expansion being the strongest in three months. Meanwhile, employment was steady after rising in the previous two months, while backlogs rose for the seventh month running at the fastest rate since March. Purchasing activity rose after falling in July, while delivery times were little changed compared with July. On the price front, input price inflation accelerated for the first time in four months, though modestly, due to higher material prices. However, output prices fell for the first time in 2026 so far. Lastly, business sentiment weakened to a seven-month low.

The RatingDog China Manufacturing PMI declined to a four-month low of 50.9 in July 2026 from 51.7 in June, falling below forecasts of 51.5, as output and new orders grew more slowly. Output continued to rise, while new orders increased for the 14th consecutive month, the longest streak since 2018, supported by stronger foreign sales, which rose for the first time in three months. Meanwhile, employment increased for the second straight month, with job creation reaching its strongest level since August 2023. Delivery times lengthened for the fifth consecutive month, but the extent of the delays remained only marginal. On the price front, input price inflation eased for the third consecutive month to its weakest level since January. Meanwhile, output prices were unchanged after six consecutive months of increases. Finally, business sentiment improved, supported by expectations of stronger market demand, new product development, expanded production capacity, and increased efficiency.

The RatingDog China Manufacturing PMI inched down to a three-month low of 51.7 in June 2026 from 51.8 in May, but above forecasts of 51.6. It also remained above the long-run survey trend of 50.8 since 2004, and caps off the strongest quarter since late 2020. Output grew solidly, while new orders rose for the thirteenth straight month, matching the joint-longest expansion sequence since 2018. However, foreign sales fell for the second straight month. Meanwhile, employment climbed for the first time in three months, with job creation reaching its strongest level since August 2023. Delivery times lengthened only marginally, marking the weakest deterioration in the current four-month sequence. On prices, input price inflation eased from April's four-year high to its weakest level since January. Meanwhile, output price inflation edged up, extending its increase to a sixth consecutive month, the longest such sequence since 2021. Finally, sentiment weakened to a five-month low.