The final manufacturing PMI weighed in at 44.7, up 0.3 points versus its flash estimate but still nearly 2 points short of its final print in February and even further below the 50-expansion threshold. This was its lowest reading since May 2020.

Output actually recorded a marginal increase but only on the back of lower backlogs as new orders fell at an accelerated pace. Job creation was positive but the weakest in more than two years and business expectations for the coming 12 months, already historically soft in February, ticked down for the first time in five months.

However, a further significant easing supply-chain pressures and soft demand allowed input costs to fall for a second month running and at the quickest pace since May 2020. In turn, factory gate inflation slowed sharply and to its lowest in over two years.

The upward revision to the headline index leaves intact a generally grim picture of German manufacturing which seems likely to weigh on GDP growth this quarter. Even so, with the German ECDI at 36 and the ECDI-P at 33, for now economic activity in general continues to run quite well ahead of market expectations.

No revision is expected to the flash 44.4 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 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.