China's official manufacturing purchasing managers' index (PMI) stood at 49.8 in August 2026, up from 49.2 in July but still below the 50-point threshold that marks expansion, indicating factory activity contracted for a second straight month [1, 2, 3]. NBS statistician Huo Lihui said there was a "significant improvement in manufacturing; sixteen of the 21 industries surveyed saw an increase in their performance compared with the previous month" [1].
Among these improving industries were electrical machinery and equipment sectors, which showed an expansion in both production and market demand, according to Huo [3]. However, some sectors lagged, including chemical raw materials, steel production, and chemical materials, which remained below 50 and indicated weak market activity [1, 3].
Outside manufacturing, China’s non-manufacturing PMI—which tracks construction and services—stood at 49.0 in August, unchanged or weaker than expectations, signaling contraction in those sectors as well [1, 3]. The construction business activities PMI dropped to 46.9, marking the weakest reading since the pandemic began [1]. Huo attributed the slowdown to "extreme weather such as heavy rain and typhoons in some areas," which delayed construction progress [1].
In July 2026, data for industrial output, consumption, and investment had already missed expectations, with retail sales and industrial profits slowing [1, 2]. Economic growth in China slowed to 4.3% in the second quarter of 2026, marking the weakest pace since late 2022 [2]. Goldman Sachs estimated growth for the third quarter to come in around 4.0%, below Beijing’s target range of 4.5% to 5% [1].
Rising commodity prices pushed input and output price indexes higher in August, though the increase was driven by supply constraints rather than demand growth, said Zhiwei Zhang, chief economist at Pinpoint Asset Management [3]. Beijing officials have pledged new fiscal and monetary measures to support the economy, but analysts expect the scale of support to remain limited [2].
The National Bureau of Statistics released the August PMI data on August 31, 2026, providing the latest snapshot of China’s factory and service sector conditions [1, 2, 3].
