PUBLISHED May 28, 2026
Manufacturing PMI: 50.3 — Stable, With Acceleration in Production
According to “2026年4月中国采购经理指数运行情况 [China PMI Performance in April 2026]”, published by the National Bureau of Statistics of China on 30 April 2026, China’s Manufacturing PMI registered 50.3 percent in April — down 0.1 percentage point from March’s 50.4, essentially unchanged. The overall manufacturing business climate remains in stable expansion territory.
The production sub-index rose slightly to 51.5 (up 0.1 points), indicating that manufacturing production activity accelerated modestly in April. The new orders sub-index fell to 50.6 (down 1.0 point) but remained above the 50 neutral threshold, indicating that manufacturing demand continued to expand — just at a somewhat slower pace. Raw material inventories improved to 49.3 (up 1.6 points), with the rate of inventory decline narrowing significantly, suggesting that procurement activity is beginning to rebuild depleted stocks.
The employment sub-index edged up to 48.8 (up 0.2 points) — still below 50, indicating net employment contraction in the manufacturing sector, but with the rate of decline improving for the second consecutive month. Supplier delivery times remained extended at 49.5 (unchanged from March), continuing a pattern of supply chain delays that has persisted through the first four months of 2026.
The Price Story: Purchase Prices at 63.7, Factory Gate at 55.1
The most significant data in the April manufacturing PMI concerns prices. The raw material purchase price index stood at 63.7 — essentially unchanged from March’s 63.9, which had been the highest reading since the post-pandemic commodity surge. The factory gate (ex-factory) price index registered 55.1 — also essentially unchanged from March’s 55.4.
Both readings are well above 50, indicating that prices are rising at both the input and output ends of the Chinese manufacturing supply chain. The gap between the two — 63.7 for inputs versus 55.1 for outputs — means that Chinese manufacturers are absorbing some portion of their input cost increases rather than fully passing them through to customers. This margin compression pattern is consistent with what has been documented in Japanese (TDB survey) and European data: the Iran War’s energy shock is raising costs faster than selling prices can follow, squeezing corporate profits across the global manufacturing sector.
For China specifically, the elevated purchase price index reflects the country’s heavy dependence on imported energy and petrochemical feedstocks. China is the world’s largest importer of crude oil, and a significant proportion of that oil arrives via tankers that transit the Indian Ocean from the Persian Gulf. The Strait of Hormuz disruption raises shipping costs and spot prices for Chinese petroleum imports directly, feeding through into the costs of China’s vast petrochemical, plastics, and chemical manufacturing sectors.
Export Orders Cross 50: A Meaningful Signal
One of the most notable developments in the April data concerns export orders. The new export orders sub-index crossed above 50 for the first time in over a year, registering 50.3 in April — up from 49.1 in March. This is a meaningful threshold crossing: it means that, on balance, Chinese manufacturing firms are reporting expanding rather than contracting international orders.
The context for this improvement is important. Through most of 2025, Chinese export orders were depressed by a combination of weak global demand, the escalation of US-China trade tensions, and the general uncertainty that accompanied the early months of the Iran War. The US tariff environment drove a significant shift in American import sourcing — away from China toward Taiwan, Vietnam, Thailand, and other Asian suppliers — which reduced China’s export order pipeline in traditional categories.
The April recovery in export orders likely reflects a combination of factors: the partial stabilisation of the geopolitical environment following the April 8 ceasefire announcement; the underlying structural strength of China’s industrial export position in categories including semiconductors, electric vehicles, and capital equipment; and the base effect from the very weak export order readings of April–May 2025 when US tariffs first took effect. Whether the above-50 reading in April represents a durable recovery or a brief improvement against a weak comparison base will be clearer in the coming months’ data.
The April PMI data reveals an unusual pattern by enterprise size: the PMI improvement came from smaller firms rather than larger ones. Large enterprises’ PMI fell 1.4 percentage points to 50.2 — still positive, but with notable monthly deterioration. Medium enterprises’ PMI rose 1.5 points to 50.5. Small enterprises’ PMI rose 0.8 points to 50.1 — just crossing above the expansion threshold.
This size divergence likely reflects several concurrent dynamics. Large Chinese manufacturers — particularly those in capital-intensive industries like steel, aluminium, chemicals, and automotive — are more directly exposed to the energy and feedstock price increases that have dominated the April cost environment. The sharp drop in large enterprise PMI (-1.4 points) is consistent with these sectors absorbing disproportionate input cost pressure.
Smaller manufacturers, by contrast, operate more in domestic consumer-oriented categories where price and demand dynamics are somewhat more insulated from global energy shocks. The improvement in small enterprise PMI to just above 50 also reflects the continued effect of government support measures targeting small and medium enterprises — credit access, tax relief, and targeted subsidies that have been maintained through the current uncertainty period.
The April PMI data reveals an unusual pattern by enterprise size: the PMI improvement came from smaller firms rather than larger ones. Large enterprises’ PMI fell 1.4 percentage points to 50.2 — still positive, but with notable monthly deterioration. Medium enterprises’ PMI rose 1.5 points to 50.5. Small enterprises’ PMI rose 0.8 points to 50.1 — just crossing above the expansion threshold.
This size divergence likely reflects several concurrent dynamics. Large Chinese manufacturers — particularly those in capital-intensive industries like steel, aluminium, chemicals, and automotive — are more directly exposed to the energy and feedstock price increases that have dominated the April cost environment. The sharp drop in large enterprise PMI (-1.4 points) is consistent with these sectors absorbing disproportionate input cost pressure.
Smaller manufacturers, by contrast, operate more in domestic consumer-oriented categories where price and demand dynamics are somewhat more insulated from global energy shocks. The improvement in small enterprise PMI to just above 50 also reflects the continued effect of government support measures targeting small and medium enterprises — credit access, tax relief, and targeted subsidies that have been maintained through the current uncertainty period.
The non-manufacturing sector tells a more concerning story. The business activity index fell 0.7 percentage points to 49.4 in April — the first reading below the 50 neutral threshold since the second half of 2025. The composite PMI, which combines manufacturing production with non-manufacturing business activity, held barely above water at 50.1 (down 0.4 points), reflecting the drag from non-manufacturing.
Within non-manufacturing, construction fell sharply to 48.0 (down 1.3 points) — firmly in contraction. China’s construction sector has been navigating the aftermath of the real estate sector’s structural adjustment since 2021, and the April data confirms that the recovery in construction activity that was visible through 2025 has lost momentum. The new orders index for construction fell to 41.6 — a deeply negative reading indicating that construction firms are experiencing a significant contraction in incoming work.
The service sector business activity index fell to 49.6 (down 0.6 points). Within services, transport, postal, telecommunications, and broadcasting services remained in strong expansion (above 55.0). By contrast, wholesale, retail, and personal services all fell below 50. This pattern is consistent with a service sector where digital infrastructure and logistics continue to grow strongly while consumer-facing services — dependent on household spending confidence — face more subdued conditions.
The most concerning price dynamic in the April PMI data comes from the non-manufacturing sector. The input price index registered 51.7 — still above 50, meaning input costs continue to rise. But the selling price index fell to 48.1 (down 1.8 points) — below 50, meaning that non-manufacturing firms are, on average, lowering their selling prices even as their input costs rise.
This combination — rising costs, falling prices — represents genuine margin compression in the service and construction sectors. It reflects the deflationary undertow that persists in parts of the Chinese economy even as upstream costs rise. Consumer-facing service businesses, in particular, are competing in a market where household price sensitivity remains high, limiting their ability to pass cost increases through to customers.
The construction sector’s input price index rose to 54.9 (up 2.2 points) while its selling price index fell to 49.0 — a particularly acute version of the cost-price squeeze that is visible across the sector in multiple countries. Construction firms globally are experiencing the same dynamic: materials costs driven higher by energy and supply chain disruption, while the underlying demand for their services is insufficient to support price increases.
Despite the current weakness in non-manufacturing, the forward-looking business activity expectations index rose to 54.7 (up 0.5 points). In manufacturing, the production and business activity expectations index rose to 54.5 (up 1.1 points). These forward expectations readings — both comfortably above 50 and both improving — suggest that Chinese businesses anticipate conditions will improve over the coming months, even as current readings show strain.
This optimism likely reflects three factors: the partial stabilisation following the ceasefire announcement; expectations that government policy support will continue and potentially intensify if current weakness persists; and the structural confidence in China’s industrial and export position that has been broadly maintained despite the trade and geopolitical headwinds of the past year.
The April 2026 PMI data presents China as an economy that is maintaining expansion at the headline level — composite PMI 50.1 — but where the composition of that expansion is shifting. Manufacturing is holding, driven by production and export orders. Non-manufacturing is slipping below the expansion threshold, weighed down by construction and consumer services. Input prices are elevated across the economy, reflecting global energy cost transmission. And the margin between what Chinese businesses pay for inputs and what they charge for outputs is narrowing — a dynamic that, if sustained, will eventually translate from corporate profit pressure into employment decisions and investment restraint.
The non-manufacturing sector tells a more concerning story. The business activity index fell 0.7 percentage points to 49.4 in April — the first reading below the 50 neutral threshold since the second half of 2025. The composite PMI, which combines manufacturing production with non-manufacturing business activity, held barely above water at 50.1 (down 0.4 points), reflecting the drag from non-manufacturing.
Within non-manufacturing, construction fell sharply to 48.0 (down 1.3 points) — firmly in contraction. China’s construction sector has been navigating the aftermath of the real estate sector’s structural adjustment since 2021, and the April data confirms that the recovery in construction activity that was visible through 2025 has lost momentum. The new orders index for construction fell to 41.6 — a deeply negative reading indicating that construction firms are experiencing a significant contraction in incoming work.
The service sector business activity index fell to 49.6 (down 0.6 points). Within services, transport, postal, telecommunications, and broadcasting services remained in strong expansion (above 55.0). By contrast, wholesale, retail, and personal services all fell below 50. This pattern is consistent with a service sector where digital infrastructure and logistics continue to grow strongly while consumer-facing services — dependent on household spending confidence — face more subdued conditions.
The most concerning price dynamic in the April PMI data comes from the non-manufacturing sector. The input price index registered 51.7 — still above 50, meaning input costs continue to rise. But the selling price index fell to 48.1 (down 1.8 points) — below 50, meaning that non-manufacturing firms are, on average, lowering their selling prices even as their input costs rise.
This combination — rising costs, falling prices — represents genuine margin compression in the service and construction sectors. It reflects the deflationary undertow that persists in parts of the Chinese economy even as upstream costs rise. Consumer-facing service businesses, in particular, are competing in a market where household price sensitivity remains high, limiting their ability to pass cost increases through to customers.
The construction sector’s input price index rose to 54.9 (up 2.2 points) while its selling price index fell to 49.0 — a particularly acute version of the cost-price squeeze that is visible across the sector in multiple countries. Construction firms globally are experiencing the same dynamic: materials costs driven higher by energy and supply chain disruption, while the underlying demand for their services is insufficient to support price increases.
Despite the current weakness in non-manufacturing, the forward-looking business activity expectations index rose to 54.7 (up 0.5 points). In manufacturing, the production and business activity expectations index rose to 54.5 (up 1.1 points). These forward expectations readings — both comfortably above 50 and both improving — suggest that Chinese businesses anticipate conditions will improve over the coming months, even as current readings show strain.
This optimism likely reflects three factors: the partial stabilisation following the ceasefire announcement; expectations that government policy support will continue and potentially intensify if current weakness persists; and the structural confidence in China’s industrial and export position that has been broadly maintained despite the trade and geopolitical headwinds of the past year.
The April 2026 PMI data presents China as an economy that is maintaining expansion at the headline level — composite PMI 50.1 — but where the composition of that expansion is shifting. Manufacturing is holding, driven by production and export orders. Non-manufacturing is slipping below the expansion threshold, weighed down by construction and consumer services. Input prices are elevated across the economy, reflecting global energy cost transmission. And the margin between what Chinese businesses pay for inputs and what they charge for outputs is narrowing — a dynamic that, if sustained, will eventually translate from corporate profit pressure into employment decisions and investment restraint.
