Global manufacturing activity, at a PMI of 49.6, remained nearly flat in April to extend a run of 48 and 49 readings going back to September last year. And based on news orders, at 49.4 in April and 49.5 in March, a continued run of high sub-50 results would be no surprise (an unfavorable note concerning global cross-border trade is greater weakness in export orders, at 48.4 in April though this is an improvement from March's 47.7).

Output at 50.8 and employment at 50.5 are running slighlty above 50, both suggesting that global manufacturers are keeping themselves busy working down backlogs. And though new orders are lagging, manufacturers may well be patient to hold onto their staffs given hopes for better times ahead as expectations for future output rose 1/2 point to an optimistic 63.0.

One clear positive in the report is cooling in inflation pressures, whether for inputs at 52.3 or selling prices at 51.6. Both of these readings are down from March and, especially for prices, strikingly near the 50 line.

By country, both the US and China are noted as expanding and Japan and the euro area as contracting.

J.P. Morgan Global Manufacturing PMI gives an overview of the global manufacturing sector. It is based on monthly surveys of over 10,000 purchasing executives from 32 of the world’s leading economies, including the U.S., Japan, Germany, France and China which together account for an estimated 89 percent of global manufacturing output. It reflects changes in global output, employment, new orders and prices. The Global Manufacturing PMI is seasonally adjusted at the national level to control for varying seasonal patterns in each country and is produced by J.P. Morgan and Markit Economics in association with ISM and the International Federation of Purchasing and supply Management (IFPSM).

Investors need to keep their fingers on the pulse of the economy because it dictates how various types of investments will perform. The J.P. Morgan Global Manufacturing PMI provides advance insight into the global manufacturing sector, which gives investors a better understanding of business conditions and valuable information about the economic backdrop of global markets. The stock market likes to see healthy economic growth because that generally 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 data are also used by many Central Banks to help make interest rate decisions.

The J.P. Morgan Global Manufacturing PMI data give a detailed look at the manufacturing sector including the pace of manufacturing growth and the direction of growth for this sector. Since the manufacturing sector is a major source of cyclical variability in the economy, this report has a big influence on the markets. In addition, its sub-indexes provide a picture of output, employment, new orders and prices.