China manufacturing PMI rebounds to 49.8 in August as new orders return

This is above Bloomberg’s 49.5 consensus.

China’s manufacturing purchasing managers’ index (PMI) rose to 49.8 in August, up 0.6 percentage point (pp) from July and above Bloomberg’s 49.5 consensus, as new orders returned to expansion, UOB Kay Hian said.

The new orders sub-index climbed 2.1 pps to 50.6, whilst the manufacturing output sub-index rose 0.5 pp to 50.4. New export orders increased 0.5 pp to 50.1.

The larger increase in total new orders suggests domestic demand led the improvement, reversing July’s pattern.

The purchases index also rose to 50.5, up 1.1 pps, whilst the imports index increased 1.1 pps to 48.6.

Input costs increased, with the purchase prices index rising 3.4 pps to 56.6. The output prices index returned to expansion at 50.4, up 2.6 pps.

The gap between purchase and output prices widened to 6.2 pps from 5.4 pps, indicating continued margin pressure.

Manufacturing employment fell 0.3 pp to 48.7, whilst the business expectations index eased 0.3 pp to 53.8.

The non-manufacturing PMI remained at 49.0 in August, below Bloomberg’s 49.4 consensus. The construction industry index fell 0.1 pp to 46.9, whilst the services index held at 49.3.

Demand remained weak across non-manufacturing industries. The new orders sub-index fell 0.3 pp to 44.1, whilst new export orders remained at 47.0.

The input prices index rose 1.4 pps to 51.1, whilst the selling prices index increased 1.4 pps to 49.3.

The large-sized enterprises composite PMI returned to expansion at 50.6, up 1.1 pps, supported by higher manufacturing orders.

The medium-sized enterprises index fell 0.3 pps to 49.4, whilst the small-sized enterprises index rose 0.5 pp to 47.9.

“August’s PMI data was mixed, with the recovery concentrated in manufacturing,” UOB Kay Hian said.

It added that the return of new orders and new export orders to expansion was encouraging, whilst the non-manufacturing sector remained a drag.

“More targeted policy support will be needed in the coming months to stabilise domestic demand in [the second half of] 2026,” it said.