China’s private manufacturing sector strengthened in August, with RatingDog China General Manufacturing PMI rising from 50.9 to 51.5, a two-month high and ninth consecutive reading above 50. New orders increased for a 15th straight month, the longest expansionary sequence since 2018, while growth accelerated above its long-run average. New export orders also rose at their fastest pace in six months, helping lift production growth to its strongest since May.
Stronger demand encouraged manufacturers to increase purchasing activity at the fastest rate in four months, while backlogs accumulated at the quickest pace since March. Finished-goods inventories rose by the most since September 2025 as output expanded, but employment was unchanged after increases in June and July. Hiring by consumer-goods producers was offset by workforce reductions among intermediate- and investment-goods firms. Business expectations remained positive, although confidence weakened to its lowest since January.
Price developments were less encouraging. Input cost inflation accelerated for the first time since April as raw-material, metals and oil costs increased, although overall pressure remained moderate. At the same time, manufacturers cut selling prices for the first time in 2026, citing strong competition and promotional activity. August therefore showed firmer manufacturing demand, exports and output, but flat employment, softer confidence and renewed discounting suggest competitive and margin pressures have not disappeared.
Data Summary
| Indicator | August | July | Trend |
|---|---|---|---|
| RatingDog Manufacturing PMI | 51.5 | 50.9 | Two-month high; ninth straight month of expansion |
Components
| Component | Trend |
|---|---|
| New Orders | Rose for 15th straight month; longest expansion since 2018 |
| New Export Orders | Fastest growth in six months |
| Production | Strongest growth since May |
| Employment | Unchanged after increases in June and July |
| Backlogs of Work | Fastest increase since March |
| Purchasing Activity | Strongest growth in four months |
| Input Stocks | Rose for ninth straight month |
| Finished-Goods Inventories | Fastest increase since September 2025 |
| Input Cost Inflation | Accelerated for first time since April, but remained moderate |
| Output Prices | Cut for first time in 2026 |
| Business Confidence | Positive, but weakest since January |
| Suppliers’ Delivery Times | Broadly unchanged |
Key Takeaways
- RatingDog China General Manufacturing PMI rose from 50.9 to 51.5, extending expansion to a ninth consecutive month.
- New orders increased for a 15th straight month, while new export business grew at fastest pace in six months.
- Stronger demand lifted production growth to its strongest since May and pushed purchasing activity higher.
- Employment stalled after two months of gains, with consumer-goods hiring offset by cuts in intermediate and investment-goods sectors.
- Backlogs increased more quickly, while finished-goods inventories rose at fastest pace since September 2025.
- Input costs accelerated modestly, but firms cut output prices for first time in 2026, highlighting competitive and margin pressure.
- Business confidence remained positive but weakened to its lowest since January.
