The final PMI data confirmed another poor month for manufacturing activity in April. The 45.5 flash sector PMI was revised up just 0.1 point and, at 45.6, was still 0.7 points short of its final reading in March and well in recession territory.

Manufacturing output fell at the sharpest pace in almost three years on the back of a steep decline in overall demand. Indeed, new orders decreased at one of the most rapid rates since the arrival of Covid in the first half of 2020. In part, this was due to an accelerated fall in overseas demand, but the domestic market was also soft with ongoing strike activity an important factor. Employment continued to expand, but only marginally and by less than in March. However, growth here continued to be restrained by recruiting problems and the increase in headcount was enough to ensure the largest fall in backlogs since May 2020. Even so, business sentiment about the year ahead was positive.

Inflation pressures continued to ease on the back of improving supply conditions and lower energy costs. Input costs rose by less than their historic average and output price inflation eased to a 26-month low.

The April revision leaves intact a weak picture of French manufacturing which looks likely to subtract again from GDP growth this quarter. However, today's update puts the French ECDI at 25 and the ECDI-P at 5, indicating that overall economic activity is at least performing a little stronger than market expectations.

No revision is expected leaving the headline index at 45.5, down from March's final 47.3.

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 400 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 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 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.