The final sector PMI weighed in at 49.3, up just 0.1 point versus its flash estimate and still more than 2.0 points below the 50-expansion threshold. Manufacturing activity continues to contract but by the least since the 7-month sequence began.

Output actually rose for the first time in eight months, albeit only marginally, but new orders decreased for a ninth straight month warning that the upturn may be short-lived. That said, the drop in demand was at least the shallowest since the downtrend began. The rate of contraction in export sales also eased sharply and was the weakest since March 2022. Employment fell for a fifth successive month but with business optimism at its highest level in 12 months, many firms are reluctant to shed staff amidst what is still a tight labour market.

Meantime, significantly reduced pressure on supply chains - supplier performance improved for the first time in three-and-a-half years - contributed towards a fifth consecutive drop in input cost inflation which hit its lowest mark since July 2020. However, factory gate prices remain under upside pressure.

Today's update has some brighter points but still leaves a fairly downbeat picture of UK manufacturing and warns of a negative contribution to first quarter GDP growth. However, with the UK's ECDI and the ECDI-P at 41 and 52 respectively, overall economic activity is now running a good deal hotter than expected. Another hike in Bank Rate this month looks all the more likely.

No revision is expected to the flash report.

The Manufacturing Purchasing Managers' Index (PMI) provides an estimate of manufacturing business activity for the preceding month by using information obtained from a representative sector survey incorporating around 3,000 companies. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting). The survey covers more than 600 industrial companies and is compiled by the Chartered Institute of Purchasing and Supply (CIPS) and S&P Global.

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 ISM manufacturing index in the U.S. and the and S&P Global PMIs elsewhere, 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 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.