China’s economy maintained its expansion momentum in August 2025, as official Purchasing Managers’ Index (PMI) data revealed growth across both manufacturing and services. With improvements in production, demand, and market expectations, the data underscores a gradual recovery in economic activity.
PMI Highlights for August 2025
- Manufacturing PMI: 49.4% (+0.1 MoM)
- Non-Manufacturing Business Activity Index: 50.3% (+0.2 MoM)
- Composite PMI Output Index: 50.5% (+0.3 MoM)
Though manufacturing PMI remains slightly below the expansion threshold (50), other indicators point to steady recovery.
Manufacturing Recovery and Market Prices
- Production Index: 50.8% (+0.3 MoM), staying above 50 for the 4th consecutive month, signaling stronger manufacturing output.
- New Orders Index: 49.5% (+0.1 MoM), showing gradual demand improvement.
- Input Prices: 53.3% (+1.8 MoM).
- Factory Prices: 49.1% (+0.8 MoM).
This marks the third consecutive month of rising market prices, reflecting better pricing conditions in manufacturing.
Large vs Small Enterprises
- Large Enterprises: PMI 50.8% (+0.5 MoM), showing accelerated expansion.
- Small Enterprises: PMI 46.6% (+0.2 MoM), still weak but slightly improved.
The data highlights ongoing challenges for small firms, even as larger manufacturers benefit from stronger market demand.
Sectoral Performance
- High-Tech Manufacturing PMI: 51.9% (+1.3 MoM).
- Equipment Manufacturing PMI: 50.5% (+0.2 MoM).
- Energy-Intensive Industries PMI: 48.2% (+0.2 MoM).
High-tech and equipment manufacturing continue to lead growth, providing stronger structural support to the economy.
Market Outlook
The Business Expectation Index rose to 53.7% (+1.1 MoM), its second consecutive month of growth, showing improved confidence among manufacturers. Industries such as general equipment, railways, shipbuilding, and aerospace reported particularly optimistic forecasts, with expectations above 58%.
Meanwhile, non-manufacturing activity expanded at a faster pace:
Service Industry Business Activity Index: 50.5% (+0.5 MoM), reaching its highest point of the year.
Conclusion
China’s August PMI data confirms that the economy is on a path of gradual expansion, driven by stronger production, rising prices, and renewed confidence in key industries. While small firms still face challenges, the broader outlook remains positive, with high-tech and services playing pivotal roles in sustaining momentum.
