Comprehensive PMI Output Index Remains in Expansion Territory in May

China's Purchasing Managers' Index (PMI) for May 2026 was released. The data indicates that the country's overall economic output continues to expand.

In May, the manufacturing PMI was 50.0%, a decrease of 0.3 percentage points from the previous month. The non-manufacturing Business Activity Index and the Composite PMI Output Index stood at 50.1% and 50.5%, respectively, rising by 0.7 and 0.4 percentage points from April. This points to continued expansion in China's overall economic output.

I. Manufacturing PMI at the Expansion-Contraction Threshold The manufacturing PMI for May was 50.0%, indicating generally stable production and business operations among manufacturing enterprises.

(1) Production Maintains Expansion. The production index was 51.2%, remaining above the 50-point threshold that separates expansion from contraction, showing that production activities in the sector continued to expand. The new orders index was 49.9%, suggesting a slight moderation in market demand. By sector, the production and new orders indices for industries such as pharmaceuticals, railway/ship/aerospace equipment, and computers/communications/electronic equipment all exceeded 53.0%, indicating robust activity on both the supply and demand sides. In contrast, indices for sectors like petroleum/coal/other fuel processing, chemical fibers/rubber/plastic products, and non-metallic mineral products remained below the threshold, indicating continued weakness in both supply and demand.

(2) New Growth Drivers Continue to Improve. The PMI for high-tech manufacturing and equipment manufacturing stood at 52.9% and 52.1%, respectively, up 0.7 and 0.3 percentage points from the previous month. Both have remained in expansion territory for an extended period, with the high-tech manufacturing PMI having been above 50.0 for 16 consecutive months. These sectors maintain a sound growth momentum, demonstrating the sustained leading role of new growth drivers. The PMI for the consumer goods and high-energy-consuming industries were 49.7% and 47.1%, down 1.0 and 0.8 percentage points from April, indicating a slight weakening in market activity.

(3) Large Enterprises' PMI Stays in Expansion. The PMI for large enterprises was 51.1%, up 0.9 percentage points from the prior month. It has remained in expansion territory throughout the year, indicating a continued positive production and business operation trend for large firms. The PMI for medium and small enterprises were 48.6% and 48.5%, respectively, reflecting a decline in business confidence.

(4) Price Indices Show High-Level Fluctuation. The indices for purchase prices of major raw materials and ex-factory prices were 60.5% and 51.9%, respectively, both down by 3.2 percentage points from April. Despite the decline, they remain at relatively high recent levels, and both indices have been in expansion territory for five consecutive months, indicating a continued overall rise in market prices within the manufacturing sector. For industries such as textiles, chemical fibers/rubber/plastic products, and ferrous metal smelting and pressing, both price indices have been above 55.0% for three straight months, pointing to sustained increases in overall purchase and sales prices in these sectors.

II. Non-Manufacturing Business Activity Index Rises Above Threshold The non-manufacturing Business Activity Index for May was 50.1%, an increase of 0.7 percentage points from April, signaling a recovery in the sector's business climate.

(1) Service Sector Activity Index Enters Expansion Zone. The Business Activity Index for the service sector was 50.3%, up 0.7 percentage points from the previous month, indicating improved market activity. By industry, indices for railway transport, telecommunications/radio/TV/satellite transmission services, and insurance were all in the high-activity range above 55.0%, reflecting rapid growth in business volume. Indices for air transport and real estate remained below the 50-point threshold, indicating a lower level of business activity. Regarding market expectations, the Services Business Activity Expectation Index was 55.4%, continuing to reside in a high-confidence range, suggesting that most service sector firms maintain an overall optimistic outlook for near-term market development.

(2) Construction Sector Activity Index Recovers. The Business Activity Index for the construction sector was 48.8%, up 0.8 percentage points from April, showing an improvement in business conditions. The Construction Business Activity Expectation Index was 51.5%, rising 1.0 percentage points from the prior month, indicating that construction firms' confidence in future industry development has recovered somewhat.

III. Composite PMI Output Index Continues to Expand In May, the Composite PMI Output Index was 50.5%, an increase of 0.4 percentage points from April, indicating that overall business production and operational activities in China continue to expand. The manufacturing production index and the non-manufacturing business activity index, which constitute the Composite PMI, were 51.2% and 50.1%, respectively.