China: Manufacturing and non-manufacturing PMIs rise in June
Latest reading: China’s official NBS Manufacturing PMI rose to 50.3 in June 2026, up from 50.0 in May and above market expectations. The reading signaled a third straight month of expansion in factory activity, helped by resilient high-tech manufacturing exports tied to AI-related demand. This offset continued weakness in shipments of other goods and still-muted domestic demand. Production strengthened further, while new orders returned to growth after declining in the previous month. Export orders also moved back into expansion, pointing to some improvement in external demand. Labour-market conditions remained soft, although purchasing activity recovered and supplier delivery times showed signs of improvement. Cost pressures moderated, but input prices remained elevated.
The Non-Manufacturing PMI edged up to 50.2 in June 2026 from 50.1 in May, outperforming expectations for a slight contraction. Services activity improved marginally, supported by robust growth in telecommunications, internet software and IT services, financial services, and insurance. However, air transport and real estate remained in contraction. Construction activity also improved, although it continued to sit below the expansion threshold. New orders strengthened across both construction and services, but remained in contractionary territory overall. Meanwhile, input prices declined.
Panelist insight: Commenting on the data, Nomura analysts said:
“We believe the PMI improvements were partly driven by incomplete seasonal adjustments around quarter-end and expect no major rebound in June activity data. The Middle East conflict has disrupted factory operations across raw material sectors. Both retail sales and fixed asset investment contracted in May, as aggregate domestic demand is being weighed on by payback effects from the trade-in program, the prolonged property slump and a worsening of the double K-shapes.”