The contraction in German manufacturing activity was slightly shallower than originally thought in November but remains very steep. At 42.6, the sector PMI was 0.3 points stronger than its flash estimate and nearly 2 points above its final October mark but still deep in recession territory.

Both output and new orders continued to decline but at least the falls here were the smallest in half a year. Even so, backlogs also fell again and the downturn in headcount accelerated. Net job losses have now been recorded in each of the last five months. Purchasing activity was similarly trimmed but by the least since May. Looking ahead, manufacturers remained pessimistic regarding output prospects over the coming year although expectations did recover further from September's recent low to hit their highest level since May.

Despite the positive headline revision, the final November PMI data leave intact a dismal picture of German manufacturing. In terms of underlying trends, the worst may be over but there is nothing in today's report to point to any near-term recovery. Today's update leaves the German RPI at minus 26 and the RPI-P at minus 14, both measures still showing overall economic activity lagging market expectations

No revision is expected to the flash data leaving the headline index at 42.3, up from October's final 40.8.

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 500 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 Markit 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.