China’s RatingDog/S&P Global Manufacturing PMI eased to 51.8 in May from 52.2 in April, staying above 50 for a sixth straight month, as input price inflation eased for the first time in six months.

Over the weekend we had the official PMIs:

• China’s official manufacturing PMI slipped to 50.0 in May from 50.3, matching forecasts, as export orders contracted sharply; the non-manufacturing PMI rose to 50.1, beating the 49.5 consensus.

Summary: Source: RatingDog/S&P Global

• The RatingDog China General Manufacturing PMI eased to 51.8 in May from 52.2 in April, remaining above the 50.0 threshold for a sixth consecutive month and above the long-run survey average of 50.8
• New orders growth eased from April but remained among the highest recorded over the past five years; new export orders saw a slight decline
• Output rose further, the third-strongest expansion since the second half of 2024, easing from April’s 22-month high
• Input price inflation eased for the first time in six months and output price inflation for the first time in seven months, though input costs remained above the long-run survey average
• Supplier delivery times lengthened for a third successive month; input stocks rose for a sixth consecutive month as manufacturers continued to build safety inventories
• Employment contracted marginally overall, though consumer goods firms continued to hire
• Business confidence for the 12-month output outlook remained optimistic, moderating slightly from April but in line with the year-to-date average

China’s manufacturing sector sustained solid expansion in May, with the RatingDog/S&P Global General Manufacturing PMI holding comfortably above the no-change mark for a sixth consecutive month, while a first easing of inflationary pressures in roughly half a year offered cautious relief to firms that have faced sustained cost pressure since the Middle East conflict began.

• RatingDog China General Manufacturing PMI, May 2026: 51.8
  • prior: 52.2

New orders remained a bright spot, with demand growth easing only modestly from April and staying among the highest levels recorded over the past five years. Domestic demand was the primary driver, as new export orders slipped slightly in May, a detail that warrants attention given the broader softening in global trade conditions. Output rose for another month, the third-strongest pace of expansion since the second half of 2024, even as it stepped back from April’s 22-month high.

The survey’s most significant finding was a simultaneous easing in both input and output price inflation, the first such deceleration in six and seven months respectively. Manufacturers linked the prior cost surge to higher raw material and energy prices, supply chain disruption and the broader impact of the Middle East conflict. While the slowdown in inflation is a welcome development, input prices continued to rise faster than their long-run average, indicating that cost pressures have not been eliminated, only reduced at the margin.

Supply chains remained under strain. Supplier delivery times lengthened for a third successive month, prompting manufacturers to continue building input inventories, which rose for a sixth consecutive month. The stock-building impulse reflects precautionary behaviour rather than demand confidence, with firms continuing to hedge against future shortages and price increases.

Employment contracted marginally overall, though consumer goods producers bucked the trend with continued hiring. Backlogs of work grew for a fourth month running, partly reflecting order intake strength and partly input shortages constraining throughput.

Business confidence for the year ahead remained positive, with firms citing anticipated demand growth, new customer development, product launches and capacity improvements, though optimism edged down slightly from April amid ongoing geopolitical uncertainty.

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The first easing in input and output price inflation in six and seven months respectively is the most market-relevant signal in the release, offering tentative evidence that the worst of the war-driven cost surge through Chinese supply chains may be peaking. For commodity markets the detail that input prices, while slower, remain above their long-run average means any relief is partial. The stock-building dynamic, with input inventories rising for a sixth consecutive month, suggests manufacturers are still hedging against further disruption rather than signalling genuine demand confidence. Export orders slipping marginally in May, even as the domestic new orders picture stayed near five-year highs, is worth watching as a potential leading indicator of external demand softening feeding into China’s industrial output later in the quarter.

This article was written by Eamonn Sheridan at investinglive.com.