BEIJING, April 1 - China's manufacturing sector continued to record expansion in March, marking a fourth consecutive month of growth, according to the private-sector RatingDog China General Manufacturing Purchasing Managers' Index (PMI) compiled by S&P Global.
The survey showed the PMI eased to 50.8 in March, down from 52.1 in February and below analysts' expectations of 51.6. The index uses 50 as the threshold between expansion and contraction.
New orders expanded for the 10th consecutive month, and production increased for a fourth month running. New export orders also rose in March, although their pace of growth slowed compared with February. Over the first quarter of 2026 as a whole, the survey noted that output growth was the fastest since the fourth quarter of 2024.
Cost dynamics, however, were a dominant theme in the report. "Notably, cost pressures intensified significantly," said Yao Yu, founder at RatingDog. The survey recorded input costs climbing at the quickest rate since March 2022, while output prices rose at their fastest pace in four years as manufacturers sought to pass on higher costs.
The pickup in inflationary pressures was linked in the report to the war in the Middle East. A Chinese central bank adviser cited by the survey warned that imported inflation stemming from the conflict will place pressure on China’s economy and that policymakers will need to balance rising inflation with slowing growth.
The S&P Global-compiled survey also highlighted renewed supply chain strains in March. Suppliers' delivery times lengthened for the first time in five months and to the greatest degree since December 2022. Firms attributed delays to disruptions, volatile input prices and supplier capacity constraints.
On the labour and backlog fronts, employment rose at a quicker rate as companies responded to higher orders and growing backlogs. Outstanding business increased for a second straight month and did so at the fastest rate since last September. Purchasing activity expanded for a third month, though the pace moderated from February.
Finished goods inventories declined as some manufacturers met demand using existing stock rather than building inventories.
Despite the headwinds from rising costs and longer lead times, manufacturers retained a degree of optimism about production over the coming year. The survey said this confidence was supported by expectations for stronger demand, investment in capacity and anticipated supportive government policies. Nonetheless, sentiment softened from February's recent peak as firms adjusted to higher input prices and supply-side delays.
Economists cited in the report warned that an input-cost shock to the world's largest manufacturing base, which employs hundreds of millions, could squeeze already thin margins. They added, however, that China is better shielded against the crisis than many parts of Asia or Europe.