China’s Economic Output Expands Steadily Despite Mild Manufacturing PMI Pullback

China’s overall economic output maintained expansion in May 2026 with differentiated sector performance, official data confirms. Released on May 31 by the National Bureau of Statistics Service Survey Center and the China Federation of Logistics and Purchasing, the latest purchasing managers’ index readings reflect steady industrial operations, recovering non-manufacturing vitality and robust growth momentum from emerging industries.

The month’s manufacturing PMI stood at 50.0 percent, down 0.3 percentage points from April but staying at the boom-bust threshold that signals stable overall factory activity. The non-manufacturing business activity index rose 0.7 percentage points month on month to 50.1 percent, while the composite PMI output index increased 0.4 percentage points to 50.5 percent, confirming sustained overall economic expansion across the country.

Manufacturing operations remained stable with structural improvements despite slightly softened market demand. The production index registered 51.2 percent, continuing to expand and supporting steady industrial output. The new orders index edged down to 49.9 percent, reflecting mild weakening in overall market demand. Industrial divergence became prominent across sectors. High-end fields including pharmaceuticals, aerospace equipment and electronic communication devices saw vigorous growth in both production and new orders, while traditional energy and building material sectors faced insufficient supply and demand momentum.

New growth drivers further strengthened their leading role. The PMI of high-tech manufacturing rose 0.7 percentage points month on month to 52.9 percent, staying in expansion territory for 16 consecutive months. Equipment manufacturing PMI also climbed 0.3 percentage points to 52.1 percent. In contrast, consumer goods and high-energy-consuming industries recorded moderating activity, with their PMI readings declining month on month.

Industrial price growth slowed while remaining elevated. Both major raw material purchase prices and factory-gate prices fell 3.2 percentage points from April yet remained in expansion zones for five straight months. Lower global commodity prices and moderating domestic procurement activities eased cost pressures, though upstream prices still maintained an upward trend. Business performance varied by enterprise scale, as large enterprises achieved steady expansion with a PMI of 51.1 percent, while medium and small-sized enterprises experienced mild cooling.

China’s non-manufacturing sector regained expansion momentum in May. The service industry business activity index reached 50.3 percent, with railway transportation, telecommunications and insurance sectors maintaining high prosperity. Most service enterprises hold optimistic market expectations, as indicated by the 55.4 percent business outlook index. The construction sector also saw marginal improvement, with its business activity index and outlook index both rising month on month, lifting industry confidence.

Current economic operation features mild external demand cooling, stabilising domestic demand, ongoing kinetic restructuring and moderating inflationary pressure. Policy-backed infrastructure projects and innovative financial tools have effectively underpinned domestic recovery. Moving forward, manufacturing activity will maintain moderate expansion. Seasonal construction peaks, expanding overseas demand for domestic equipment and continuous breakthroughs in artificial intelligence and advanced manufacturing innovation will further unlock industrial potential and consolidate high-quality economic development.