Business activity contracted again in February, albeit at a slower rate than at the start of the year. The 47.1 flash sector PMI was revised up to 47.5, now 0.5 points above its final January reading and a 10-month high but still below the 50-expansion threshold for a 19th straight month.

Output, new orders, employment and stocks of purchases all recorded fresh losses and the longest increase in supplier delivery times in a year-and-a-half was more a reflection of disruptions to traffic in the Red Sea than stronger demand. Exports were particularly weak and backlogs were pared further to support production. Business expectations about the year ahead were little changed from their January level.

Meantime, worsening vendor performance contributed towards a second successive increase in overall costs, part of which was passed on via higher factory gate prices which were hiked for a fourth straight month.

Much like the rest of Europe (Germany a notable exception) today's February update suggests that the worst may be over for UK manufacturing. Even so, with demand still falling, the near-term outlook is hardly bright and the BoE will be keeping a very wary eye on cost developments. Indeed, with today's positive headline revision boosting the UK RPI to 43 and the RPI-P to 42, pressure for an early cut in Bank Rate has just got a little less.

No revision is expected, leaving the headline index at 47.1, up from January's final 47.0.

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). The survey covers more than 600 industrial companies and is compiled by the Chartered Institute of Purchasing and Supply (CIPS) and 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 and 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 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.