Official Manufacturing and Non-Manufacturing PMI Both Rebounded in June

Overview

This report tracks China's official NBS PMI data for June. Manufacturing PMI rose to 50.3 in June and non-manufacturing PMI rose to 50.2, overall pointing to a modest rebound in manufacturing and services activity. Within manufacturing, new orders, output, and export orders improved; within non-manufacturing, services improved slightly while construction remained in contraction territory.

Core views

Goldman Sachs believes that the June PMI data reflect some recovery in China's manufacturing and services activity, but the magnitude of improvement was limited. Construction continued to contract, possibly affected by adverse weather disruptions such as summer heat and heavy rainfall. On prices, manufacturing input costs remained in expansion territory while output prices fell into contraction territory, implying that profit margins are still being squeezed.

Analysis framework

The report uses official NBS PMI and its major sub-indices for month-on-month comparison, and compares actual readings with Goldman Sachs' forecasts and Bloomberg consensus expectations; it also analyzes changes in business conditions by sector, enterprise size, trade-related sub-indices, and price sub-indices.

Methodology notes

• Macro Data TrackingPMI Diffusion Index

  A PMI reading above 50 usually indicates expansion in activity, while a reading below 50 usually indicates contraction in activity.

  The report assesses short-term marginal changes in economic activity through manufacturing, non-manufacturing, and sub-indices including new orders, output, export orders, prices, inventories, and employment.

• Macro Surprise AssessmentAsia-MAP

  Asia-MAP for official manufacturing PMI: 0 (3, 0).

  The report assigns this data a score of 3/5 for growth relevance and a score of 0 for surprise relative to consensus expectations, indicating that the data have moderate relevance to growth but show no significant surprise relative to market expectations.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China's Macroeconomy

  PMI is a core high-frequency indicator for measuring short-term economic activity conditions.

  Strengths

  Both manufacturing and non-manufacturing PMI rose, while manufacturing new orders, output, and export orders improved.

  Weaknesses

  Construction remained below 50, and employment, inventories, and activity in some sectors remained weak.

  Comparison

  The main PMI readings in June were all above May levels, and both manufacturing and non-manufacturing readings exceeded Goldman Sachs' forecasts and Bloomberg consensus expectations.

  Risks

  The extent of improvement was limited; if subsequent order or price sub-indices retreat, the signal of economic stabilization may weaken.

• Chinese Equity Market and Cyclical Sectors

  PMI improvement usually helps demand and earnings expectations, but the report does not provide direct allocation recommendations.

  Strengths

  New orders and output sub-indices were above 54 in sectors such as agricultural and sideline food processing, special equipment, computers, communications, and electronic equipment.

  Weaknesses

  Activity weakened in sectors such as chemical fibers, rubber and plastic products, and ferrous metal smelting and rolling processing.

  Comparison

  PMI for medium-sized enterprises rose to 50.5, while PMI for large and small enterprises fell to 50.7 and 48.2 respectively, showing divergence by enterprise size.

  Risks

  Output prices below 50 and still-high input costs may limit profit margin recovery.

• Commodities and Energy Prices

  Manufacturing price sub-indices were affected by the recent pullback in commodity prices.

  Strengths

  As concerns over Middle East supply disruptions eased and tanker traffic through the Strait of Hormuz increased, lower oil prices may reduce some input cost pressure.

  Weaknesses

  The input cost sub-index remained well above 50, indicating that corporate cost pressures have not fully subsided.

  Comparison

  The input cost sub-index fell from 60.5 to 54.2, while the output price sub-index fell from 51.9 to 48.2, indicating broad cooling in price indicators.

  Risks

  If energy or raw material prices rise again, pressure on manufacturing profit margins may increase once more.

Key data

• NBS Manufacturing PMI50.3 in June 2026, 50.0 in MayGoldman Sachs forecast 49.9, Bloomberg consensus 50.1.
• Official Non-Manufacturing PMI50.2 in June 2026, 50.1 in MayGoldman Sachs forecast 49.9, Bloomberg consensus 49.9.
• Manufacturing New Orders Sub-Index51.2, previous 49.9The most notable improvement among the major sub-indices.
• Manufacturing Output Sub-Index51.4, previous 51.2Continued to remain in expansion territory.
• Manufacturing Employment Sub-Index48.4, previous 48.6Edged down slightly and remained below 50.
• Manufacturing New Export Orders Sub-Index50.1, previous 48.6Trade-related sub-indices improved noticeably.
• Manufacturing Imports Sub-Index49.6, previous 48.8Improved somewhat but remained below 50.
• Services PMI50.4, previous 50.3Edged up slightly.
• Construction PMI49.0, previous 48.8Remained below 50 and at a low level relative to its historical average.
• Manufacturing Input Cost Sub-Index54.2, previous 60.5Declined noticeably but remained above 50.
• Manufacturing Output Price Sub-Index48.2, previous 51.9Fell into contraction territory, indicating weak price pass-through.

Impact & implications

The improvement in PMI in June helps confirm a marginal stabilization in short-term economic activity, especially with rebounds in manufacturing orders, output, and export orders. However, construction and real estate-related services remain weak, and input prices exceeding output prices imply that the recovery in aggregate demand and corporate earnings remains uneven. For asset pricing, the data are more supportive of China's growth expectations in a mild way rather than signaling a strong recovery.

Risks

• Construction PMI remained in contraction territory, and PMI in real estate service-related sectors was also below 50.
• Manufacturing input prices remained above 50 while output prices were below 50, so profit margins continue to be under pressure.
• Adverse weather such as summer heat and heavy rainfall may disrupt construction and outdoor activities.
• Activity in some manufacturing sectors weakened, and business conditions diverged across enterprise sizes.
• The improvement in PMI was limited; if order and export sub-indices cannot continue to improve, growth momentum may weaken.

What to watch

• Whether subsequent official NBS manufacturing and non-manufacturing PMI readings continue to stay above 50.
• Whether the new orders, output, and new export orders sub-indices can sustain their improvement.
• Whether construction PMI and real estate services PMI can move out of contraction territory.
• Whether the gap between input costs and output prices narrows, to judge whether profit margin pressure is easing.
• Changes in commodity prices, especially oil prices, and whether Middle East supply disruptions again affect the cost side.