Manufacturing PMI ended March virtually unchanged from the mid-month flash, edging a tenth lower to 49.2. This is the fifth straight sub-50 reading (indicating month-over-month contraction) but it is the least contractionary of the run which began in November.

A negative in the report is marginal contraction in new orders, a result that doesn't point to acceleration in general activity in the months ahead. Respondents are blaming high interest rates and inflation for the subdued demand.

Yet production rose to end four prior months of contraction. Improved delivery times, a rising refrain heard in many business surveys, are giving production a lift. Price pressures are easing, both for inputs and also selling prices, the latter lowered, according to the report, to help boost sales.

These results hint at improvement for the ISM manufacturing at the top of the hour which, however, is expected to edge lower to 47.4.

The final manufacturing PMI for March is expected to come in at 49.3, unchanged from the mid-month flash to indicate slight contraction.

Based on monthly questionnaire surveys of selected companies, the Purchasing Managers' Manufacturing Index (PMI) offers an advance indication on month-to-month activity in the private sector economy by tracking changes in variables such as production, new orders, stock levels, employment and prices across manufacturing industries. The final index for the current month is released roughly a week after the flash.

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 in the U.S. and 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 Markit 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.

Markit originally began collecting monthly Purchasing Managers' Index (PMI) data in the U.S. in April 2004, initially from a panel of manufacturers in the U.S. electronics goods producing sector. In May 2007, Markit's U.S. PMI research was extended out to cover producers of metal goods. In October 2009, Markit's U.S. Manufacturing PMI survey panel was extended further to cover all areas of U.S. manufacturing activity. Back data for Markit's U.S. Manufacturing PMI between May 2007 and September 2009 are an aggregation of data collected from producers of electronic goods and metal goods producers, while data from October 2009 are based on data collected from a panel representing the entire U.S. manufacturing economy. Markit's total U.S. Manufacturing PMI survey panel comprises over 600 companies.