The S&P South Korea manufacturing PMI survey indicates that the sector contracted for the eleventh consecutive month in May but at a slightly less pronounced rate, with the survey's headline index increasing to 48.4 from 48.1 in April. Respondents reported another month of weak demand from both domestic and foreign clients but also noted that supply chain pressures and cost pressures had moderated.

The survey shows output and new orders fell at a sharper pace in May, but new export orders fell at a less pronounced rate. Respondents also reported the biggest increase in payrolls in more than a year and the strongest level of business confidence in ten months as they anticipate stronger demand later in the year. The survey suggests price pressures moderated in May in response to a decline in commodity prices, with input costs reported to have increased at the slowest pace in more than two years and selling prices reported to have been lowered for the first time in nearly three years.

The Purchasing Managers' Manufacturing Index (PMI) is based on monthly questionnaire surveys of selected companies which provide an advance indication of what is really happening in the private sector economy by tracking changes in variables such as output, new orders, stock levels, employment and prices across the manufacturing sectors.

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 purchasing managers' manufacturing indexes, 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.