- media@moneyinfocus.news
China’s manufacturing sector continued to expand in June 2026, with factory activity exceeding market expectations as stronger production and a rebound in new orders offset persistent weakness in domestic demand.
According to data released by the National Bureau of Statistics (NBS), the official Manufacturing Purchasing Managers’ Index (PMI) rose to 50.3 in June from 50.0 in May, above economists’ expectations of 50.1. A reading above 50 indicates expansion in manufacturing activity.
The latest figure marks the third consecutive month of expansion this year, suggesting that China’s industrial sector continues to benefit from resilient export demand, particularly in high-technology industries tied to the global artificial intelligence investment cycle.
The NBS data indicated that growth remains uneven across China’s manufacturing sector.
Factory output accelerated, with the production index rising to 51.4 from 51.2 in May. New orders also returned to expansion, increasing to 51.2 after registering 49.9 in the previous month.
Export demand showed signs of improvement, with the new export orders index climbing back above the expansion threshold to 50.1, compared with 48.6 in May, reflecting continued strength in overseas demand for technology-related products.
Analysts have noted that exports linked to semiconductors, electronics and AI infrastructure continue to outperform more traditional manufacturing segments, where demand remains comparatively subdued.
Despite stronger production and orders, employment conditions remained weak.
The employment index edged down to 48.4, remaining below the 50-point threshold that separates expansion from contraction, indicating manufacturers continue to exercise caution in hiring.
Meanwhile, purchasing activity returned to expansion, rising to 51.4 from 49.8, while supplier delivery times improved modestly to 49.9, suggesting supply chain conditions continue to normalize.
Inflation indicators presented a mixed picture during June.
Input costs remained elevated but eased significantly, with the input price index falling to 54.2 from 60.5 in May, reflecting moderating cost pressures for manufacturers.
At the same time, factory gate prices weakened. The output price index declined to 48.2, marking the first contraction in selling prices in six months and highlighting continued competitive pressures across parts of the manufacturing sector.
Business confidence improved modestly, with the production and business expectations index rising to 54.3 from 53.9, suggesting manufacturers remain cautiously optimistic about activity in the months ahead.
The June PMI data reinforce expectations that China’s industrial recovery continues to rely heavily on export-oriented, high-value manufacturing, while softer domestic consumption and a fragile labor market remain key challenges for the broader economy.
Source: National Bureau of Statistics of China (NBS).
