The flash data were unrevised in the final report, leaving the headline PMI at 42.7, deep in recession territory, short of June's 43.4 and its weakest mark in 38 months.

Production (42.7) also fell at the fastest rate in more than three years as total new orders extended their downswing on the back of losses in both the domestic and overseas markets. Not for the first time, output would have declined even more sharply but for a further unwinding of backlogs. A decline in input purchasing was similarly steep and the fastest since May 2020 while headcount was also down again. Input costs fell further too and by the most since May 2009 which allowed manufacturers to cut factory gate prices for a third month running and by the most in almost 14 years.

In terms of national PMIs, the best performing country was again Greece (53.5), which was the only member state to post above 50. Spain (47.8) and Ireland (47.0) were not too far behind but the Netherlands (45.3), France (45.1), Italy (44.5), Germany and Austria (both 38.8) were all deep in recession territory.

The July update shows Eurozone manufacturing mired in recession with no obvious sign of any recovery. Inflation developments have been positive for a while but until the service sector follows suit, the ECB will not be impressed. The region's ECDI now stands at 4 and the ECDI-P at minus 9. Together, the measures show overall economic activity running broadly in line with market expectations.

No revision is expected to the flash print.

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). Released by S&P Global, national data are included for Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece. These countries together account for an estimated 89 percent of Eurozone manufacturing activity.

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.