China Manufacturing PMI Stalls at 50.0 in May as Small Firms Contract

China's manufacturing purchasing managers' index (PMI) dropped to 50.0 in May 2026, down from 50.3 in April, according to data released June 1 by the National Bureau of Statistics. The neutral reading suggests the sector is neither expanding nor contracting overall, masking a sharp divergence between large firms and smaller ones. The PMI for large enterprises rose to 51.1 from 50.2, but medium- and small-sized manufacturers saw declines to 48.6 and 48.5, respectively, signaling contraction. The new orders sub-index fell to 49.9, indicating weakening demand. Rising input costs continued to pressure manufacturers after the Strait of Hormuz conflict. The purchase price index remained elevated at 60.5 in May, down from peaks above 63 in March and April but well above the pre-conflict level of 54.8 in February.