April was a poor month for Eurozone manufacturing. At a revised 45.7, the final sector PMI was 0.1 point above its flash estimate but still short of March's final 46.1 and, more importantly, well below the 50-expansion threshold. Indeed, the latest outturn was the weakest in four months.

On a brighter note, output (47.3) recorded a 12-month high and moved closer to the 50-mark, but the improvement here could prove only temporary as new orders fell at an accelerated pace. In fact, the drop in demand was the steepest so far this year. Declining backlogs continued to provide some support for production, but job losses were again a feature, albeit the least marked in seven months. By contrast, purchasing activity decreased by more than in March. Inflationary pressures continued to ease with input costs falling further and factory gate prices reduced for the 12th consecutive month. However, despite the gloomy backdrop, business expectations for the year ahead strengthened for a second straight month and were the highest since February 2022.

In terms of national PMIs, the best performing member state was Greece (55.2) which, alongside Spain (52.2) and the Netherlands (51.3), recorded positive growth. Ireland (47.6) and Italy (47.3) posted moderate declines while France (45.3) and, in particular, Austria (43.5) and Germany (42.5), saw conditions deteriorate markedly.

The final April data show a clear divergence in performance across the region but, for the Eurozone as a whole, manufacturing is clearly struggling. Without an upturn in demand, the sector looks likely to continue to weigh on GDP growth. Today's update puts the Eurozone RPI at minus 6 and the RPI-P at 4. Both readings are close enough to zero to indicate economic activity in general performing much as forecast.

No revisions are expected leaving a 45.6 headline index, down from March's final 46.1.

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.