The flash 46.6 sector PMI was unrevised in the final data for January. Accordingly, the index remains at a 10-month high, albeit still indicative of a contraction in overall activity.

Output (46.6 after 44.9) declined by the least in nine months and the drop in new orders was similarly the shallowest since last April. Backlogs essentially followed suit and employment was trimmed further although only modestly. Similarly, purchasing reductions were less aggressive than in December and input buying fell at the weakest pace since last March. However, suppliers' delivery times lengthened for the first time in a year due to the disruptions to traffic passing through the Red Sea. Nonetheless, business confidence rose to a 9-month high. Input costs saw another fall as did factory gate prices and the rate of decline for both accelerated for the first time since last July and September respectively.

In terms of nation PMIs, the best performing member state was Greece (54.7) which was the only country to post above the 50-expansion threshold. Ireland (49.5) and Spain (49.2) essentially stagnated, and the Netherlands (48.9) and Italy (48.5) contracted only mildly. However, Germany (45.5), France (43.1) and Austria (43.0) all signalled hefty declines despite each achieving a multi-month high.

Taken at face value, today's update suggests that the recession in Eurozone manufacturing continued into the current quarter. There are some reasons for optimism further out but for now the sector can be expected to continue to weigh on GDP growth. That said, the January update nudges up the region's RPI to minus 6 and the RPI-P to minus 8. Both values show overall economic activity just about keeping up with market expectations.

No revisions are expected to the flash data leaving the sector PMI at 46.6, up from December's final 44.4.

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.