The final manufacturing PMI weighed in at 46.3, down 0.2 points versus its flash estimate and now a full point short of its final mark at the start of the year. It was also a 3-month low and far enough beneath the 50-expansion threshold to indicate a sector in recession.

Output actually recorded its first, albeit marginal, increase in nine months but with new orders continuing to fall, near-term prospects remain bleak. Export sales were especially weak. Stocks of purchases were cut sharply as purchasing activity was trimmed but job creation was slightly stronger than in January as business expectations about the coming year continued to improve. Indeed, sentiment hit its highest level in 12 months although it was still well shy of its long-run average.

Easing supply-chain pressures and falling demand prompted the first decline in input prices since September 2020 but factory gate prices again rose and, while the inflation rate saw a 2-year low, it was still historically firm.

The downward revision to the headline index leaves intact a generally grim picture of German manufacturing which seems likely to weigh on GDP growth this quarter. Indeed, the ongoing slide in orders suggests that any recovery next quarter will be only mild at best. Today's update puts the German ECDI at minus 7 and the ECDI-P at minus 8, both values indicating just a limited degree of overall economic underperformance versus market expectations.

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 500 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 data are released by 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 Markit 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 S&P Global 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.