RatingDog PMI caps China’s strongest quarter for manufacturing since 2020
A 51.7 reading, even easing slightly from May, still confirms China’s strongest manufacturing quarter since Q4 2020, a constructive signal for risk sentiment tied to Chinese growth even as the headline print itself eased to a three-month low. The combination of slowing input cost inflation and accelerating job creation is a favourable mix for margins and should support the read-through to broader China demand indicators, though the continued fall in new export orders, now a second straight month, flags external demand as the weaker leg of the recovery. Softening 12-month sentiment to its lowest since January is worth flagging for anyone using this print to extrapolate momentum into the second half, since it suggests manufacturers themselves see the current pace as harder to sustain.
Rating Dog Manufacturing PMI, June 2026: 51.7
- expected 51.6, prior 51.8
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China’s RatingDog manufacturing PMI eased to 51.7 in June but capped the strongest quarter for the sector since 2020, with input inflation cooling and hiring accelerating.
Yesterday, official, National Bureau of Statistics (NBS) data:
- China factory PMI beats forecast at 50.3 as AI-linked exports drive expansion
- China’s domestic demand engine sputtering despite stronger headline PMI
Summary:
- The RatingDog China General Manufacturing PMI eased to a three-month low of 51.7 in June from 51.8 in May, according to the survey, marking a seventh straight month above the 50.0 no-change mark
- The second-quarter average of 51.9 was the strongest for any quarter since the fourth quarter of 2020
- New orders rose for a thirteenth consecutive month, the joint-longest run since 2018, even as new export orders fell for a second straight month
- Manufacturing output grew for a seventh successive month, though the pace eased to a three-month low; output growth for the quarter was still the strongest since the second quarter of 2024
- Employment rose for the first time in three months, with job creation at its fastest pace since August 2023
- Input cost inflation slowed to a five-month low, while output price inflation edged up slightly for a sixth straight month of increases
- Suppliers’ delivery times lengthened for a fourth month, though delays were only marginal and confined to the investment goods sector
- Business sentiment on the 12-month outlook stayed positive but softened to its weakest level since January
China’s manufacturing sector closed out its strongest quarter since 2020 in June, even as the pace of improvement itself eased slightly, according to the latest RatingDog China General Manufacturing PMI survey. The headline index slipped to a three-month low of 51.7 from 51.8 in May, marking a seventh consecutive month above the 50.0 threshold that separates expansion from contraction and keeping the reading above the survey’s long-run average of 50.8 since 2004. The second-quarter average of 51.9 was the strongest for any quarter since the final three months of 2020.
New orders extended their run of growth to thirteen consecutive months, matching the joint-longest sequence since 2018, with all five components of the index contributing positively to the headline figure. That strength in domestic demand came despite a second straight monthly fall in new export business, though the survey noted the decline was only marginal. Higher new orders supported a seventh straight month of production growth, with the pace easing to a three-month low even as quarterly output growth reached its strongest level since the second quarter of 2024.
Manufacturers responded to the improved demand backdrop by increasing headcount for the first time in three months, with the rate of job creation the fastest since August 2023. Backlogs of work continued to build for a fifth consecutive month, though the pace of accumulation remained below the survey’s long-run trend, and finished goods inventories rose for a third straight month.
Cost pressures showed clearer signs of easing. Input prices rose for a twelfth consecutive month, the longest inflationary run since the first half of 2022, but the rate of increase slowed to its weakest since January, down sharply from April’s four-year high. Output prices continued to rise for a sixth straight month, the longest such sequence since 2021, with the pace ticking up slightly even as input cost pressures cooled.
Supply chains showed only marginal strain, with suppliers’ delivery times lengthening for a fourth month running, though the extent of delays was the mildest in that sequence and confined to the investment goods sector, while consumer and intermediate goods makers reported faster deliveries. Purchasing activity extended its run of growth to a sixth month, supporting a seventh consecutive rise in stocks of purchases, the joint-longest such sequence since 2007.
Business confidence in the 12-month outlook remained in positive territory, with firms citing expectations of stronger new orders, business development and improved production capacity. However, the overall degree of optimism softened to its weakest level since January, as persistent external demand weakness and a more cautious stance among some firms tempered the broader improvement in operating conditions.
This article was written by Eamonn Sheridan at investinglive.com.