Manufacturing activity was revised a little weaker in February. At 47.4, the final sector PMI was down 0.5 points versus its final reading in January and is now 2.6 points below the 50-expansion threshold.

Output fell at the fastest rate since last October as new orders again declined and at a faster rate than in January. International demand was the weakest since May 2020. Purchasing activity was similarly cut as firms sought to reduce stock levels but delivery delays from suppliers were the least widespread since January 2020. Backlogs were trimmed as employment increased for a second successive month and businesses became slightly more optimistic about prospects for the coming year. That said, confidence remained subdued by historical standards.

Input costs increased at the slowest pace since September 2020, largely reflecting declining energy prices. In turn, this accommodated the smallest rise in factory gate prices in almost two years.

Today's update suggests that manufacturing will struggle in the current quarter and may well subtract from real GDP growth. Services will probably have to perform well for total output not to fall below its fourth quarter level. That said, at 18 and 25 respectively, both the French ECDI and ECDI-P continue to show that economic activity in general is running somewhat faster than 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 400 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 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.