The slowdown to a four-month low of 50.9 signals moderating but still-positive momentum in China’s private manufacturing sector, a more nuanced picture than outright weakness given new orders extended their longest growth run since 2018 and export orders returned to expansion after three months. The standout detail for supply chain watchers is the longest continuous build-up in input stocks since 2006-07, which has now started curbing fresh purchasing activity, a dynamic worth monitoring for its read-through to industrial commodity demand in the months ahead. Broadly flat output prices alongside cooling input cost inflation point to limited pass-through inflation pressure from Chinese manufacturing for now, a contrast to the sharper cost pressures being reported in Japan and Australia’s PMIs this cycle. With sentiment on the 12-month outlook improving despite the slower headline pace, the data supports the view that China’s private manufacturing sector is decelerating gently rather than stalling.
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Earlier:
China’s private factories are still growing, just at a gentler pace, with export orders coming back and price pressures fading.
Summary:
- The RatingDog China General Manufacturing PMI eased to a four-month low of 50.9 in July, down from 51.7 in June, marking an eighth consecutive month of expansion
- New orders rose for a fourteenth straight month, the longest sequence since 2018, though the pace of growth slowed
- New export orders returned to expansion for the first time in three months
- Manufacturing output extended its expansion to eight months, though growth eased to a four-month low following the strongest quarter of gains since mid-2024
- Employment rose for a second straight month at the fastest pace since August 2023, while input buying fell for the first time since November 2025 as stocks of purchases rose for an eighth month, the longest such run since 2006-07
- Output prices were broadly flat and input price inflation slowed to a six-month low, while business sentiment on the 12-month outlook improved from June
China’s private-sector manufacturing activity continued to expand in July, though at a softer pace, according to the latest RatingDog China General Manufacturing PMI survey, as easing cost pressures and a return to growth in export orders offset a moderation in the overall rate of improvement.
The headline seasonally adjusted RatingDog PMI, formerly published under the Caixin brand, posted 50.9 in July, down from 51.7 in June and a four-month low, though still above the 50.0 threshold that separates expansion from contraction for an eighth consecutive month. The current upturn is the joint-longest in five years, matching the run from November 2023 to June 2024, with all five components of the index making positive contributions for a second straight month.
New orders received by Chinese manufacturers rose for a fourteenth consecutive month, the longest such sequence since 2018, with growth attributed to stronger market demand, increased international orders, new business channels and improved product quality. New export orders returned to expansion for the first time in three months. Manufacturing output extended its expansion to eight months, supported by rising orders, stronger demand, export growth, expanded capacity and new products, though the pace of growth eased to a four-month low following the strongest quarter of increases since the second quarter of 2024. Employment rose for a second consecutive month at the fastest pace since August 2023, driven by higher orders, rising production and the use of temporary workers.
On the cost side, pressures continued to ease. Input price inflation moderated for a third straight month to its weakest since January, allowing firms to hold output prices broadly flat after six consecutive months of increases, the longest such run since 2021. Despite rising new orders and backlogs, manufacturers cut input purchasing for the first time since November 2025, a reflection of stocks of purchases climbing for an eighth straight month, the longest sequence since 2006-07. Suppliers’ delivery times lengthened for a fifth month running, though delays remained only marginal.
RatingDog founder Yao Yu said the manufacturing sector continued to expand in July, albeit at a slower pace, with sustained new order growth and further easing of cost pressures providing support, while the return of export orders to expansion was a positive signal. Yu added that the reduction in purchasing activity and the ongoing accumulation of input stocks warranted attention, but that the PMI was expected to remain in expansionary territory in the near term, even as the pace of growth becomes more moderate. Chinese goods producers remained optimistic in their 12-month output forecasts, with sentiment strengthening since June on expectations of stronger demand, new product development, expanded capacity and improved efficiency.
This article was written by Eamonn Sheridan at investinglive.com.
