The 48.5 flash sector PMI was unrevised in the final data for February and so remains 0.3 points short of its final mark at the start of the year and 1.5 points below the 50-expansion threshold. Eurozone manufacturing remains in the doldrums.

Manufacturing output (50.1) actually just about crept into positive growth territory, in part reflecting a marked shortening in vendor delivery times. However, demand remained weak as new orders declined for a tenth successive month with overseas sales especially soft. Purchases and stocks of inputs were down and pre-production inventories decreased for the first time since September 2021 as companies stepped up their efforts to unwind safety buffers. Still, improving business optimism was reflected in employment which rose moderately and at the quickest rate in four months. Expectations for future output were the most upbeat since Russia invaded Ukraine.

Input cost inflation eased significantly, hitting a two-and-a-half year low. Factory gate prices still rose, but the inflation rate here also hit a 2-year trough.

Regionally in terms of national PMIs, the best performing member state was Italy (52.0) which, along with Greece (51.7), Ireland (51.3) and Spain (50.7), posted positive growth. However, the Netherlands (48.7), France (47.4), Austria (47.1) and, in particular, Germany (46.3) all contracted.

Taken at face value, today's update suggests that Eurozone manufacturing activity will shrink this quarter and put a cap on any growth in the region's real GDP. The worst for the sector may be over and sentiment is clearly improving but until demand turns the corner, the outlook must remain poor. The revised data put the Eurozone's ECDI at minus 15 and the ECDI-P at minus 22, both measures signalling a modest degree of 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 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). Released by S&P Global, national data are included for Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece. These countries together account for an estimated 89 percent of Eurozone manufacturing activity.

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 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 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.