China's April Manufacturing PMI Expanded Slightly, While Non-manufacturing Weakened

Overview

The report analyzes China's official PMI and RatingDog manufacturing PMI for April 2026. The core conclusion is that manufacturing remained slightly in expansionary territory, supported by new export orders, production, and raw material inventories; however, the non-manufacturing PMI fell below 50, with services and construction weakening simultaneously, indicating that domestic demand remains relatively weak and downward pressure from real estate continues.

Core views

Nomura believes China's economy continues to show divergence: external demand and export-related manufacturing remain relatively resilient, especially as new export orders returned to expansionary territory for the first time in two years and the RatingDog manufacturing PMI rose significantly to 52.2; however, insufficient domestic demand is dragging on new orders, services consumption, and construction activity. On the policy front, despite Shenzhen easing home purchase restrictions, the probability of major nationwide property stimulus from the central government in the near term is not high.

Analysis framework

The report uses a combination of PMI subcomponent breakdowns, comparisons with market expectations, comparisons by enterprise size, observations of price subcomponents, and interpretation of policy signals to assess marginal changes in manufacturing, non-manufacturing, exports, consumption, real estate, and inflationary pressure.

Methodology notes

• Macro Sentiment IndicatorPMI Expansion/Contraction Line

  50 is the dividing line between expansion and contraction

  A PMI above 50 typically indicates expanding activity, while below 50 typically indicates contracting activity. The report uses the official manufacturing PMI, non-manufacturing PMI, and subindices to assess the structure of economic momentum.

• Macro Structure AnalysisDivergence Between Domestic and External Demand

  Exports are stronger than domestic demand

  By comparing new export orders, the RatingDog manufacturing PMI, and the services and construction PMIs, the report shows that external demand is supporting manufacturing, while household consumption and real estate-related demand remain relatively weak.

• Inflation TrackingPrice Subcomponents and PPI Assessment

  Input price and output price indices lead in reflecting industrial goods price pressure

  The input price index at 63.7 and output price index at 55.1 remained elevated, and based on this the report expects PPI inflation to continue rising year-on-year in April.

Asset mapping & comparison

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

• China Macroeconomy

  Research subject

  Strengths

  The manufacturing PMI stayed above 50, production and new export orders improved, and the RatingDog PMI rose significantly.

  Weaknesses

  The non-manufacturing PMI fell below 50, services and construction both declined, and domestic demand was weak.

  Comparison

  Manufacturing performed better than non-manufacturing, and external-demand-related indicators were better than domestic-demand-related indicators.

  Risks

  Continued property downturn, pressure on household purchasing power, and policy stimulus falling short of expectations.

• China Manufacturing

  Directly benefits from export demand and production resilience

  Strengths

  The production index was 51.5, new export orders were 50.3, and the PMI for small and medium-sized enterprises returned to expansionary territory.

  Weaknesses

  Overall new orders fell from 51.6 to 50.6, indicating insufficient domestic orders.

  Comparison

  The PMI for small and medium-sized enterprises improved, while the PMI for large enterprises fell from 51.6 to 50.2.

  Risks

  A pullback in external demand, rising raw material costs, and disruptions from global energy prices.

• China Services and Consumption

  Reflects pressure on domestic demand

  Strengths

  Sectors such as postal services and railway transportation remained in expansion, possibly supported by export transportation demand.

  Weaknesses

  The services PMI fell from 50.2 to 49.6, with wholesale and retail creating a clear drag.

  Comparison

  Services were weaker than manufacturing, and pre-holiday travel and catering demand appeared relatively subdued.

  Risks

  The catch-up effect after the phase-down of consumer goods trade-in policies, and insufficient household income and purchasing power.

• China Real Estate and Construction Chain

  Macro drag

  Strengths

  Shenzhen eased home purchase restrictions, and local governments continued trying to stabilize the real estate market.

  Weaknesses

  The construction PMI fell to 48.0, the lowest since 2010; the construction employment subindex has been below 50 since the end of 2023.

  Comparison

  Construction was weaker than services and manufacturing, and was an important drag on the decline in non-manufacturing.

  Risks

  Absence of major nationwide property stimulus, the policy space for traditional easy-to-implement measures having already been consumed, and the property downturn continuing to suppress household purchasing power.

Key data

• Official Manufacturing PMI50.3 in April 2026, 50.4 in March, 50.1 expectedStill in expansionary territory and better than both market and Nomura expectations.
• Official Non-manufacturing PMI49.4 in April 2026, 50.1 in March, 49.8 expectedBelow expectations and fell below 50, dragged down by both services and construction.
• Production Index51.5 in April 2026, 51.4 in MarchRose against seasonal patterns, indicating production activity remained strong.
• New Orders Index50.6 in April 2026, 51.6 in MarchThe decline mainly reflects relatively weak domestic demand.
• New Export Orders50.3 in April 2026, 49.1 in MarchReturned to expansionary territory for the first time in two years.
• RatingDog Manufacturing PMI52.2 in April 2026, 50.8 in March, 51.0 expected, Nomura expected 51.5Covers more small and medium-sized enterprises and exporters, reinforcing the view that exports are supporting manufacturing.
• Input Price Index63.7 in April 2026, 63.9 in MarchRemained elevated, affected by Middle East energy price shocks and rising storage prices.
• Output Price Index55.1 in April 2026, 55.4 in MarchPrice pressure remains high.
• PPI Inflation Expectation1.3% year-on-year in April 2026, 0.5% in MarchNomura expects it to be driven by continued increases in raw material prices and a low base.
• Construction PMI48.0 in April 2026, 49.3 in MarchFell to the lowest level since 2010.

Impact & implications

The implication for assets and macro assessment is that the export chain and manufacturing related to external demand have relatively more support in the near term, but domestic demand related to consumption, real estate, and construction remains under pressure. Elevated price subcomponents mean industrial goods inflation may continue to rebound, while the policy side is more focused on stability and security, so expectations for large-scale short-term stimulus should not be too high.

Risks

• Domestic demand remains persistently weak, dragging on new orders, services consumption, and wholesale and retail activity.
• The long-term downturn in the real estate sector continues to suppress household purchasing power and construction activity.
• If external demand falls back, the current manufacturing resilience supported by exports may weaken.
• High raw material and energy prices may push up costs and squeeze corporate profits.
• If the policy side continues to lack major nationwide property stimulus, market expectations for growth recovery may be revised down.

What to watch

• Whether subsequent official manufacturing PMI readings can remain above 50.
• Whether new export orders and the RatingDog manufacturing PMI can continue improving.
• The performance of the services PMI, wholesale and retail, and tourism and catering demand before and after the Labor Day holiday.
• Whether the construction PMI and construction employment subindex continue to remain weak.
• Whether PPI inflation rises to 1.3% year-on-year in April as Nomura expects.
• Whether Beijing releases clearer nationwide signals on property or demand stimulus.