Manufacturing activity continued to slide at the end of the first quarter. At 46.1, the final sector PMI was up 0.4 points versus its flash estimate but still down from February's final 46.5 and indicative of continued contraction. The latest reading was a 3-month low.

Output, employment and new business all fell again but by less than in the previous month to leave the monthly drop in the headline index attributable to suppliers' delivery times and stocks of purchases. Even so, production would have declined more steeply but for a further reduction in backlogs. Input costs also eased again but margins remained under pressure as factory prices declined more sharply. That said, optimism about prospects for the year ahead was the strongest since April last year, albeit still slightly below its long-run average.

In terms of national PMIs, the best performing member state was Greece (56.9) which, alongside Spain (51.4) and Italy (50.4), was the only country to post above 50. The Netherlands (49.7) and Ireland (49.6) were not far behind but France (46.2), and, in particular, Austria (42.2) and Germany (41.9) were deep in recession territory.

Despite the upward revision to the headline index, the final March data paint a fairly miserable picture of Eurozone manufacturing. Germany is weighing especially heavily and with demand still falling, the likelihood of any meaningful near-term recovery remains minimal. Goods production looks set to subtract again from first quarter Eurozone GDP growth. Even so, today's update puts the region's RPI at 10 and RPI-P at 12 indicating a limited degree of overall economic outperformance versus market expectations

No revisions are expected leaving the headline index at 45.7, down from February's final 46.5.

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.