China's factory gate prices rise, but consumer goods get cheaper

Factory prices in China rose by 2.8% year-over-year in April 2026, driven by higher costs for raw materials like non-ferrous metals and chemicals. At the same time, prices for everyday consumer goods like food and clothing continued to fall. This means producers are paying more for inputs, but they cannot pass those costs on to consumers, who are still seeing prices drop for many finished products.

This data shows a split in China's economy. Producers are facing higher costs for raw materials, which usually means they would raise prices for their finished goods. But prices for consumer products are still falling, suggesting weak demand from buyers. This puts pressure on manufacturers, who are squeezed between rising input costs and falling output prices. It also means consumers are not feeling the inflation that producers are experiencing.