UK manufacturing was somewhat stronger than originally thought last month. The 46.6 flash sector PMI was revised up to 47.8 and now stands just 0.1 point short of its final reading in March. However, it remains well below the 50-expansion threshold.

All five PMI components indicated a fresh deterioration in operating conditions. Production declined for a second month in a row, albeit by slightly less than in March, and reflected the fastest fall in new orders in three months. Both the domestic and overseas markets posted losses, with export orders down for a fifteenth consecutive month. Weak demand saw employment trimmed for a seventh successive month, but manufacturers remain positive about the economic outlook. In fact, optimism regarding the year ahead climbed to a 14-month high in anticipation of a general improvement in market conditions.

Helping matters was also better news on inflation. The rates for both input cost and factory gate prices fell to 35-month and 28-month lows respectively. Reduced supply chain pressures, improved material availability, declining shipping rates and weaker demand were all factors.

Nonetheless, despite the headline revision, the overall tone of the April survey remains weak and signals a soft start by manufacturing to the current quarter. Declining inflation pressures and improved optimism about the future are really the only positive developments. Today's update puts the UK ECDI at 25 and the ECDI-P at 21, indicating that overall economic activity is running somewhat ahead of market expectations. This should slightly increase the likelihood of another 25 basis point hike in Bank Rate by the BoE next week.

No revision is expected leaving the headline index at 46.6, down from March's final 47.9.

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.