China’s official NBS Manufacturing PMI unexpectedly fell to 49.2 in July 2026 from 50.3 in June, coming in below market expectations of 50.0. This marked the first contraction in factory activity since February, reflecting persistently weak domestic and external demand alongside elevated production costs.
Production declined for the first time in five months (49.9 vs 51.4 in June), and new orders slipped back into contraction after expanding in the previous month (49.9 vs 51.2). Foreign orders also returned to contractionary territory (49.0 vs 50.1).
Employment remained weak but broadly stable (49.0 vs 48.4), while purchasing activity moved back into contraction (49.4 vs 51.4). Supplier delivery times continued to lengthen (49.5 vs 49.9), signaling ongoing supply-side frictions.
On the price front, input cost inflation moderated but stayed relatively elevated (53.2 vs 54.2), whereas output prices recorded their steepest decline in nine months (47.8 vs 48.2). Business confidence softened slightly but remained in expansionary territory (54.1 vs 54.3).
