The 48.0 flash sector PMI was trimmed a tick to 47.9 in the final data for March. This leaves it more than 2 points short of the 50-expansion threshold and also well below February's final 49.3. The index has now been sub-50 for eight successive months.

Output fell on the back of soft demand and efforts to reduce excess stocks. However, new orders at least managed to creep marginally higher for the first time in 10 months and that despite a further slide in exports. Even so, production would have decreased more steeply but for another drop in backlogs. More positively, a sixth successive contraction in employment was only mainly due to the non-replacement of retiring staff and business optimism strengthened to a 13-month high, with almost 60 percent of manufacturers forecasting output to rise over the coming year

Meantime, significantly reduced pressure on supply chains - supplier performance improved by the most on record helped input cost inflation ease to its lowest mark since June 2020. In turn, while still rising, an increase in factory gate prices was less than in February.

Today's update has some cautiously brighter spots but 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 minus 3 and 5 respectively, overall economic activity is still running close to market expectations.

No revision is expected to the flash 48.0 reading.

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.