China’s manufacturing sector continued to expand in October 2026, with factory output growing at its fastest pace in six months. Stronger domestic and international demand supported production, according to a private-sector survey released on Monday.
The RatingDog China General Manufacturing Purchasing Managers’ Index (PMI) registered 52.0 in October, slightly below September’s 52.1 and in line with economists’ expectations.
Despite the modest decline, the index remained above the 50-point threshold separating expansion from contraction for the 11th consecutive month.
However, China’s official manufacturing PMI painted a weaker picture, highlighting differences in performance between private companies and larger state-owned manufacturers.
China Manufacturing PMI Shows Diverging Factory Conditions
China’s official manufacturing PMI fell to 49.3 in October from 50.1 in September, according to the National Bureau of Statistics (NBS).
The reading missed market expectations of 49.9 and slipped below the critical 50-point level, signaling a contraction in manufacturing activity.
The difference between the official and private surveys reflects their coverage of China’s industrial economy.
The government survey places greater emphasis on large manufacturers and state-owned enterprises. Meanwhile, the RatingDog survey includes a larger proportion of smaller and privately operated businesses.
Official data also revealed weaker production and demand conditions.
The manufacturing production sub-index declined to 49.8, while the new orders component dropped to 49.4. Both readings indicated contraction.
These figures suggest that larger industrial companies faced greater challenges than their smaller private-sector counterparts during October.
Factory Output Growth Reaches Six-Month High
Despite weakness in the official data, the private manufacturing survey highlighted encouraging developments in factory production.
Chinese manufacturers increased output at the fastest pace since April, supported by stronger orders from domestic and overseas customers.
Total new orders expanded for the 17th consecutive month, demonstrating sustained demand for products manufactured by companies covered in the private survey.
Export orders also increased for a fourth straight month.
However, the pace of export order growth slowed to its weakest level in three months, suggesting that international demand continued to expand at a more moderate rate.
The improvement in factory output indicates that parts of China’s manufacturing sector remain resilient despite broader economic challenges.
Chinese Manufacturers Increase Purchasing Activity
Stronger demand encouraged manufacturers to accelerate purchases of raw materials and other production inputs.
Purchasing activity expanded at its fastest pace in eight months as businesses sought to meet higher order volumes and maintain production schedules.
However, employment growth remained limited.
Manufacturers reported only marginal increases in staffing levels, suggesting that companies continued to approach hiring cautiously despite stronger production activity.
Meanwhile, outstanding workloads increased for the ninth consecutive month.
The continued accumulation of unfinished orders could indicate that production capacity is struggling to keep pace with demand in some parts of the manufacturing sector.
Together, these developments highlight improving business activity alongside ongoing operational challenges.
Input Costs Rise as Competition Pressures Selling Prices
Price developments across China’s manufacturing industry remained mixed in October.
Manufacturers reported higher input costs for the 16th consecutive month, although the rate of inflation eased compared with September.
At the same time, factory selling prices declined for the second time in three months.
Intense competition encouraged businesses to offer discounts to customers, limiting their ability to pass rising production costs on to buyers.
The combination of higher input expenses and lower selling prices could place additional pressure on manufacturers’ profitability.
However, the easing pace of input cost inflation may provide some relief if the trend continues.
Chinese Yuan Holds Near Four-Year High as Stocks Advance
China’s financial markets showed resilience despite the mixed manufacturing data.
The Chinese yuan remained close to its strongest level against the US dollar in more than four years.
Currency support came partly from Chinese exporters converting foreign-currency earnings into yuan, increasing demand for the domestic currency.
Meanwhile, Chinese equities recorded gains.
The CSI 300 Index advanced 0.4%, while the Shanghai Composite Index climbed 0.7%.
The positive stock market performance came as investors assessed the contrasting signals from China’s official and private manufacturing surveys.
China’s Manufacturing Outlook Remains Mixed
October’s PMI figures highlight the uneven nature of China’s manufacturing recovery.
The private-sector survey pointed to stronger factory output, sustained new order growth, and increased purchasing activity.
However, the official manufacturing PMI returned to contraction territory, suggesting continued weakness among larger and state-owned industrial companies.
Rising input costs, declining selling prices, and limited employment growth also present challenges for manufacturers.
Nevertheless, resilient domestic demand and continued export order growth could support production in the coming months.
Investors and economists will closely monitor upcoming manufacturing data to determine whether stronger private-sector activity can translate into a broader improvement across China’s industrial economy.
