By Ellen Zhang and Ryan Woo
BEIJING, Feb 2 (Reuters) – China’s factory activity expanded at a faster pace in January as export orders rebounded and output growth accelerated, lifting hiring to the highest level in three months, a private-sector survey showed on Monday, beating expectations.
The RatingDog China General Manufacturing Purchasing Managers’ Index (PMI), compiled by S&P Global, rose to 50.3 at the start of 2026 from 50.1 in December, in line with analysts’ forecasts and marking the highest since October. The 50-mark separates growth from contraction.
That contrasts with an official PMI released on Saturday that showed factory activity faltered as orders deteriorated at home and abroad. Analysts said differences in survey coverage and respondent profiles likely contributed to the divergent readings.
China’s economy grew 5.0% last year, meeting the government’s target by seizing a record share of global demand for goods to offset weak domestic consumption. Beijing has also stepped up trade diplomacy, striking deals with Britain and Canada in recent weeks, as U.S. President Donald Trump disrupts long-standing ties with allies.
According to the RatingDog survey, the rate of output growth accelerated to a three-month-high, while new business rose for an eighth consecutive month in January.
New export orders swung back to expansion after contracting in December, with firms citing stronger demand from Southeast Asia in particular.
Manufacturers typically accelerate overseas shipments ahead of the Chinese New Year holiday. This year’s nine-day festival falls in mid-February, prompting factories to front-load production while supply conditions remained broadly stable in January.
Rising order inflows and increased production needs led manufacturers to raise staffing levels for the first time in three months. The expansion in workforce capacity, coupled with efficiency gains, helped reduce outstanding workloads for the first time in eight months.
On the price side, average input costs climbed to the highest since September, driven by metals price hikes.
In response, producers raised their factory gate charges for the first time since November 2024. Average charges for exported goods also increased at the fastest pace in a year and a half.
Sustained price increases could provide some relief to producers’ margins, many of which have been squeezed as firms cut prices to defend or expand market share amid weak domestic demand.
“If cost pressures persist while demand recovery is limited, profit margins will remain under pressure,” said Yao Yu, founder of RatingDog.
Business sentiment remained positive at the start of the year, underpinned by hopes that new products and expansion plans would support sales and output growth over the next 12 months. But concerns over the growth outlook and rising cost pressures weighed on sentiment, pulling overall optimism down to its lowest level in nine months.
(Reporting by Ellen Zhang and Ryan Woo; Editing by Sam Holmes)
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