June RatingDog China manufacturing PMI edged down to 51.7, but remained in expansion territory

Overview

The report comments on China's unofficial manufacturing PMI for June 2026. The core conclusion is that RatingDog China's manufacturing PMI edged down to 51.7 from 51.8 in May. Although it was below Goldman Sachs' forecast of 52.1 and Bloomberg consensus expectations of 52.0, it remained above 50, indicating that manufacturing activity continued to expand. The report also notes that the NBS manufacturing PMI rose in June, with one up and one down versus the RatingDog PMI, but both remained in expansion territory.

Core views

Goldman Sachs believes that manufacturing momentum weakened marginally in June but did not slip into contraction. Demand-side divergence was fairly evident: the new orders index edged up to 52.7, but the new export orders index fell to 49.4, showing that external demand remained weak. There were also cooling signals on the production and inventory side, with the output index falling back to 52.8 and both raw materials inventories and finished goods inventories declining. On prices, the input prices index fell sharply, mainly related to Brent crude oil prices dropping from above $100 per barrel in May to below $80 per barrel in June; however, the output prices index remained above 50 and edged higher, suggesting that the process of companies passing costs downstream was still ongoing.

Analysis framework

The report uses the PMI diffusion index framework, comparing the headline index and major sub-index changes between June and May, and directionally cross-checking the RatingDog manufacturing PMI against the NBS manufacturing PMI. The analysis focuses on overall activity momentum, orders, employment, output, delivery times, inventories, import and export orders, and price sub-indices.

Methodology notes

• Macro IndicatorPMI Diffusion Index

  50 boom-bust line

  A PMI reading above 50 generally indicates expansion in manufacturing activity, while a reading below 50 generally indicates contraction; on this basis, the report judges that manufacturing remained in expansion territory in June.

• Macro Cross-ValidationOfficial vs. Unofficial PMI Comparison

  Comparison between RatingDog PMI and NBS PMI

  The report points out that the NBS manufacturing PMI rose in June, while the RatingDog manufacturing PMI edged down slightly, but both remained above 50 and therefore jointly indicated that manufacturing activity continued to expand.

Asset mapping & comparison

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

• China's Manufacturing Activity

  The macro activity reflected directly by PMI

  Strengths

  The headline PMI, NBS PMI, new orders, employment, and output indices were all above 50, showing that manufacturing remained in expansion territory.

  Weaknesses

  The headline PMI edged down and came in below expectations, while the output index, raw materials inventories, and finished goods inventories all declined.

  Comparison

  The RatingDog PMI edged down in June, while the NBS manufacturing PMI rose; the two moved in different directions but both remained above 50.

  Risks

  If export orders remain below 50 or output continues to decline, the momentum of manufacturing expansion could weaken further.

• Brent Crude Oil and Upstream Costs

  Affects manufacturing input prices and cost pressures

  Strengths

  Brent crude oil prices fell from above $100 per barrel in May to below $80 per barrel in June, helping ease input cost pressures.

  Weaknesses

  The output prices index remained above 50 and edged higher, indicating that downstream price pass-through has not yet ended.

  Comparison

  The input prices index fell from 55.8 to 52.4, while the output prices index rose from 52.0 to 52.2, showing divergence between cost and selling-price components.

  Risks

  If oil prices rise again, input price pressures could increase once more and affect manufacturing profit margins.

Key data

• RatingDog China Manufacturing PMI51.7June data; May was 51.8, Goldman Sachs' forecast was 52.1, and Bloomberg consensus expectation was 52.0.
• New Orders Index52.7May was 52.5, indicating a slight improvement in the orders component.
• Employment Index50.5May was 49.8, rebounding above 50.
• Output Index52.8May was 53.4, indicating a slowdown in the pace of production expansion.
• New Export Orders Index49.4May was 49.6, still below 50.
• Raw Materials Inventory Index50.7May was 51.7, one of the larger declines among the major sub-indices.
• Finished Goods Inventory Index50.2May was 50.6, showing a marginal decline in the inventory component.
• Input Prices Index52.4May was 55.8, indicating a significant easing in cost pressures.
• Output Prices Index52.2May was 52.0, above 50 for the sixth consecutive month, indicating that cost pass-through downstream was still ongoing.
• Brent Crude Oil Price Backgroundfell from above $100 per barrel to below $80 per barrelThe report links the decline in the input prices index to the drop in Brent crude oil prices.

Impact & implications

The implications of this data for China macro and cyclical assets are somewhat neutral: manufacturing remains in expansion, and short-term growth momentum has not yet turned negative; however, the headline PMI came in below expectations, export orders remained below 50, and output and inventories declined, suggesting that the strength of the recovery is not balanced. Easing cost pressures is supportive of corporate margins, but output prices remain above 50, indicating that end-demand absorption and downstream price pass-through still need to be monitored.

Risks

• The new export orders index remained below 50, indicating that export-related manufacturing activity may be weak.
• The headline PMI was below Goldman Sachs' forecast and Bloomberg consensus expectations, indicating that actual activity was weaker than market expectations.
• The decline in the output index and inventory indices may suggest a marginal cooling in companies' willingness to produce and restock.
• If oil prices and other commodity prices rebound, companies' input costs could rise again.

What to watch

• Whether subsequent RatingDog and NBS manufacturing PMIs remain above 50.
• Whether the new export orders index can return above 50.
• Whether the output, new orders, and employment components continue to remain in expansion.
• Whether the gap between the input prices and output prices indices narrows, and whether cost pass-through affects downstream demand.
• The impact of changes in Brent crude oil prices on manufacturing cost pressures.