From June last year to June this year the result is the same: manufacturing contraction for S&P's sample. At 44.8 in June, Taiwan's manufacturing PMI is marginally less negative than May's 44.3 and more negative than April's 47.1. Activity isn't improving much at all.

This is evident in prices. The sample cut their selling prices in the month in unison with declines in input costs.

New orders -- a key indicator for future activity -- posted a"further substantial decline" as described by the text of the report. Export orders were the weakest in June since early in the year, especially from Europe and the US. Little wonder that the sample's year-ahead expectations have now slipped into negative territory, moving from the optimism column to the pessimism column.

Production in June fell"at a rapid pace" compared to May, purchasing activity is down, backlog depletion is ongoing, and employment is contracting at a faster pace. The sample is cutting inventories of both raw materials and finished goods.

One positive note is the supply chain where strains have disappeared: delivery times are the shortest in nearly 15 years. Note that mainland China is not mentioned anywhere in the text of the report.

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.