China Manufacturing Growth Beats Forecasts as Factory Activity Remains Resilient in May

China’s manufacturing sector continued to expand in May, outperforming market expectations despite easing from a multi-year high, according to data compiled by S&P Global.

The RatingDog China Manufacturing PMI declined to 51.8 in May 2026, down from 52.2 in April, which had marked the strongest reading in more than five years. The latest figure nevertheless exceeded economists’ forecasts of 51.4, signaling that manufacturing activity remains firmly in expansion territory.

Growth in both new orders and factory output moderated from April’s pace but remained robust, supported by steady domestic demand, new customer acquisition, and ongoing product upgrades. Export demand, however, softened slightly, reflecting continued uncertainty in global trade conditions.

Manufacturing output continued to rise at one of the fastest rates recorded since late 2024, highlighting the resilience of industrial activity despite a more challenging external environment.

Labor market conditions were less encouraging. Employment levels slipped into marginal contraction, while supplier delivery times lengthened for a third consecutive month, although delays remained relatively modest. Companies also increased purchasing activity, contributing to six straight months of rising inventories of production inputs.

On the inflation front, cost pressures showed signs of easing. Both input and output price inflation slowed for the first time in six and seven months, respectively, suggesting that price pressures may be stabilizing after a prolonged period of increases. Nevertheless, manufacturers continued to report elevated costs linked to raw materials, energy prices, and supply-chain disruptions.

Business sentiment remained positive but softened compared with previous months. Companies cited expectations for stronger domestic demand, higher order volumes, and future capacity expansion as key drivers supporting confidence.

Meanwhile, China’s official government PMI edged down to 50.0 in May from 50.3 in April, indicating that factory activity remained broadly stable but expanded at a slower pace.

The latest survey data showed that the RatingDog China Manufacturing PMI rose to 51.8 in May, above market expectations of 51.4, although down from April’s five-year high of 52.2. The reading remained comfortably above the 50-point threshold that separates expansion from contraction. New orders and production continued to grow at a solid pace despite moderating from the previous month, while export orders edged lower. Employment slipped into marginal contraction, even as manufacturers increased purchasing activity and inventory levels. Inflationary pressures also showed signs of easing, with both input and output price growth slowing for the first time in several months. Meanwhile, China’s official manufacturing PMI eased to 50.0 from 50.3 in April, pointing to slower but still positive factory activity.

While the data indicate that China’s manufacturing sector remains in expansion territory, the mixed signals across exports, employment, and business sentiment suggest that policymakers and investors will continue to monitor whether domestic demand can offset external headwinds and sustain growth momentum in the months ahead.