FX.co ★ China Factory Growth Slows More Than Expected

The RatingDog China General Manufacturing PMI eased to 50.8 in March 2026, down from 52.1 in February and below market expectations of 51.6, indicating a moderation in the pace of factory expansion. Both output and new orders continued to grow, but at a slower rate, with production rising for the fourth consecutive month. Backlogs increased as demand continued to outstrip production capacity, while employment expanded for a third straight month — the longest period of job creation since mid-2021.

Purchasing activity also rose further, leading to a modest build-up in input inventories, although stocks of finished goods edged down slightly. Supplier delivery times lengthened to the greatest extent since December 2022. Cost pressures intensified, with input price inflation accelerating to its highest level since March 2022, and output price inflation climbing to a four-year high, largely reflecting higher energy costs amid heightened tensions in the Middle East.

Despite mounting cost and supply-side pressures, manufacturers remained confident about the production outlook over the next 12 months, underpinned by stronger demand, ongoing investment in capacity, and supportive government policies.