The S&P Global China manufacturing PMI survey's headline index rose from 49.5 in October to a three-month high of 50.7 in November, indicating a return to modest growth in the sector. This survey has shown contraction in three of the last eight months. Official PMI survey data published earlier in the week showed further contraction in the sector in November, with these and other indicators suggesting that China's economy remains weighed down by weakness in the property market despite recent measures aimed at improving liquidity conditions.

Respondents to the S&P PMI survey reported output rose slightly in November after falling in October. Respondents reported the strongest increase in new orders since June but another decline in new export orders. Payrolls were cut at a less pronounced rate, while the survey's measure of business confidence rose to its highest level since July. Price pressures were reported to have moderated in November with the survey showing input costs rose at a slower pace and little change in selling prices.

Today's data were well above the consensus forecast of 49.3 for the headline index. The China RPI rose from minus 21 to plus 7 and the RPI-P rose from minus 40 to zero, indicating that recent Chinese data in sum are coming in close to consensus forecasts.

After 49.5 in October, which was 6 tenths lower than expected, S&P's manufacturing PMI in November is expected to slow to 49.3.

The S&P Manufacturing Purchasing Managers' Index (PMI) is based on monthly a questionnaire that surveys of over 500 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 S&P 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.