China: Manufacturing and non-manufacturing PMIs stay soft in August
Latest reading: China’s official NBS Manufacturing PMI rose to 49.8 in August 2026 from 49.2 in July, slightly exceeding market expectations. Despite the improvement, the index remained below the 50 threshold for a second consecutive month, signaling continued deteriorating in manufacturing sector conditions.
Output and new orders returned to expansionary territory, while employment continued to contract. Raw material inventories declined further, while supplier delivery times improved for the first time in seven months. Price pressures strengthened, with input costs rising at their fastest pace in three months, while output prices returned to growth after falling in July.
Finally, the Non-Manufacturing PMI remained unchanged at 49.0 in August 2026, falling short of expectations and signaling a continued contraction in non-manufacturing activity. Business activity and new orders declined, pointing to weaker overall demand.
Panelist insight: Commenting on the data, Nomura analysts said:
“Despite the rebound in August, we believe the underlying trend of the official manufacturing PMI remained largely steady. The high reading of 50.3 in June and the sharp decline to 49.2 in July were merely the result of substantial seasonal distortions around quarter-end and -start, with the June-July average of 49.8 matching that of August. That said, the sustained weakness in non-manufacturing warrants close attention, as the services sector remained weak and the downturn in construction deepened. Overall, the PMI data still point to a large divergence between resilient supply and weakening domestic demand.”