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Business conditions in China's manufacturing sector improved in the final month of 2025, according to the latest PMI data. Manufacturing production returned to growth amid higher inflows of new work, despite a slight fall in new exports sales. Employment also declined amid lower business optimism and concerns over costs. The rate of input price inflation intensified at the end of 2025, though goods producers continued to cut their selling prices to support sales. The headline seasonally adjusted Purchasing Managers' Index (PMI) rose above the 50.0 no-change mark in December to signal a renewed improvement in manufacturing sector conditions. At 50.1, up from 49.9 in November, the latest reading indicated a fractional expansion of the Chinese manufacturing sector. This also marked the fourth improvement in the health of the sector over the past five months. After stagnating midway through the fourth quarter, manufacturing production returned to growth in December, albeit only marginally. This was supported by higher amounts of new work, as the launch of new products and successful business development efforts reportedly boosted sales in the final month of the year. Despite greater inflows of new work, purchasing activity stagnated in December. Higher sales and lower workforce capacity led to another accumulation of backlogged orders. Turning to prices, cost burdens increased across the manufacturing sector due to rising raw material prices, especially for metals. Finally, business sentiment among Chinese manufacturers remained positive at the end of the year Powered by Commodity Insights
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