The S&P China manufacturing PMI survey shows conditions in the sector improved in February after six consecutive months of contraction, with the survey's headline index increasing to 51.6 from 49.2 in January. Respondents reported improved public health conditions have supported a similar improvement in economic conditions, with official PMI survey data also published today showing activity in both the manufacturing and non-manufacturing sectors strengthened in February.

Survey respondents reported output, new orders, and new export orders all rose in February, while payrolls were reported to have been increased for the first time in eleven months. The survey's measure of business confidence rose to to its highest level since March 2021, indicating that respondents expect further improvement in public health conditions in coming months. Respondents reported increases in both input costs and selling prices in February, with the latter increasing for the first time since April 2022.

Caixin's manufacturing PMI has been in contraction for six months in a row but, at a consensus 49.9, only the most marginal contraction is expected for February.

The S&P Manufacturing Purchasing Managers' Index (PMI) is based on monthly a questionnaire that surveys of over 500 companies which provide an advance indication of what is really happening in the private sector economy by tracking changes in variables such as output, new orders, stock levels, employment and prices across the manufacturing sectors.

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. By tracking economic data such as the purchasing managers' manufacturing indexes, investors will know what the economic backdrop is for the various markets. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers less rapid growth and is extremely sensitive to whether the economy is growing too quickly and causing potential inflationary pressures.

The S&P PMI manufacturing data give a detailed look at the manufacturing sector, how busy it is and where things are headed. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. And its sub-indexes provide a picture of orders, output, employment and prices.