The S&P Global Taiwan manufacturing PMI survey's headline index indicated again contracted in August, as it has for more than a year, with its headline index increasing only slightly from 44.1 in July to 44.3. Respondents again reported very weak demand and see little prospect of recovery.

Survey respondents reported output, new orders, and new export orders all fell at a sharp pace in August, with demand from all major export markets reported to have remained very weak. The survey also shows another decline in payrolls and a fall in its measure of business confidence, with respondents expecting output to drop further over the next 12 months. Respondents reported an increase in input costs in August but a ninth consecutive decline in selling prices.

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.