On August 31, 2026, the China Federation of Logistics & Purchasing, together with the Service Industry Survey Center of the National Bureau of Statistics, released the latest China Purchasing Managers' Index figures. The data was subsequently analyzed by Huo Lihui, the chief statistician from the Service Industry Survey Center. The August PMI reading for the manufacturing sector came in at 49.8%, representing a 0.6 percentage point increase from the previous month, signaling a recovery in overall business sentiment. Meanwhile, the non-manufacturing business activity index held steady at 49.0%, and the composite PMI output index rose to 49.5%, up 0.2 percentage points from the prior month, indicating a moderate improvement in the nation's overall output vitality.

Manufacturing PMI Rebounds

The August PMI for the manufacturing sector climbed to 49.8%, with 16 of the 21 surveyed industries reporting month-on-month improvements, pointing to a clear enhancement in manufacturing sector sentiment. Both production and demand showed synchronized expansion, with the production index and new orders index reaching 50.4% and 50.6% respectively, representing increases of 0.5 and 2.1 percentage points from the previous month. This suggests that both manufacturing output and market demand expanded compared to July. Industries such as electrical machinery and equipment, along with computers and communication electronics, recorded production and new orders indices above 53.0%, demonstrating robust output and demand. Conversely, sectors like chemical raw materials and chemical products, as well as ferrous metal smelting and rolling, remained below the critical threshold, reflecting weaker market activity. Buoyed by these improvements, corporate purchasing sentiment strengthened, with the purchase volume index rising 1.1 percentage points to 50.5%.

The momentum of new growth drivers continues to look promising, as both the equipment manufacturing and high-tech manufacturing PMIs remained in expansion territory at 51.4% and 52.9% respectively. These sectors sustained relatively rapid growth, underscoring ongoing industrial structure optimization and upgrades. The consumer goods and high-energy-consuming industries posted PMIs of 49.0% and 47.9%, up 1.2 and 0.9 percentage points respectively, with both showing recovered business sentiment. Price indices in the manufacturing sector experienced dual increases in August, influenced by rising crude oil and non-ferrous metal prices. The purchasing price index for major raw materials climbed 3.4 percentage points to 56.6%, while the ex-factory price index rose 2.6 percentage points to 50.4%, re-entering expansion territory. Notably, both price indices for the non-ferrous metal smelting and rolling industry exceeded 60.0%, with related sectors witnessing significant price hikes in both procurement and product sales.

Looking at enterprise scale, large manufacturers saw their PMI rise 1.1 percentage points to 50.6%, moving above the critical threshold and indicating markedly improved production and operational conditions. Medium-sized enterprises recorded a PMI of 49.4%, a 0.3 percentage point decline, while small enterprises posted 47.9%, up 0.5 percentage points, indicating varying degrees of recovery across different company sizes.

Non-Manufacturing Business Activity Index Remains Stable

The non-manufacturing business activity index held steady at 49.0% in August. The services sub-index remained unchanged at 49.3%, suggesting broadly stable business conditions within the services sector. Industries including postal services, telecommunications, broadcasting, television and satellite transmission, as well as internet software and information technology services, all registered business activity indices above 55.0%, reflecting sustained rapid business volume growth. In contrast, wholesale, retail, and capital market services remained below the critical threshold, pointing to weaker sector performance. The services business activity expectations index stood at 55.5%, continuing its position within the higher optimism range above 55.0%, with service enterprises expressing positive outlooks for future industry development.

The construction sector experienced a slight dip in its business activity index, falling 0.1 percentage points to 46.9%, largely attributable to construction schedule delays caused by adverse weather conditions including rainstorms and typhoons in certain regions. However, construction business activity expectations held steady at 51.8%, unchanged from the previous month, with construction enterprises maintaining a relatively stable outlook on recent market developments.

Composite PMI Output Index Improves

The composite PMI output index for August rose 0.2 percentage points from the previous month to 49.5%, reflecting a general uptick in the operational vitality of Chinese enterprises. Breaking down this composite index, the manufacturing production index contributed 50.4% while the non-manufacturing business activity index contributed 49.0%, jointly driving the measured improvement in overall economic output conditions.