UK manufacturing fared a little better than originally thought in April. The 48.7 flash sector PMI was revised up 0.4 points and at 49.1, now stands less than a point below the 50-growth threshold albeit still some 1.2 points short of its final print in March.

Output and new orders both posted fresh falls leaving the former with only one month of positive growth in the last 14. The drop in orders reflected losses in both the domestic and, in particular, overseas markets. With employment and stocks of purchases also declining, the only boost to the headline index came from longer delivery times although even this seems to have been mainly due to disruptions to traffic in the Red Sea. However, business sentiment about the coming year remained upbeat with some 52 percent of firms expecting output to increase versus just 8 percent anticipating a fall.

That said, there was more worrying news on costs which rose for a fourth successive month and by the most since February 2023. In turn factory gate inflation climbed to an 11-month high.

The revised April data suggest that UK manufacturing is close to stagnation and still suffering from rising costs a point that will not be wasted on the BoE MPC meeting next week. Still, the outlook is relatively bullish and so consistent with the findings of the latest CBI industrial trends survey. The worst is probably over for the sector but the recovery will not be easy. Today's update puts the UK RPI at minus 21 and the RPI-P at minus 17. Recent economic activity in general has underperformed market expectations.

No revisions are expected leaving a 48.7 headline index, down from March's final 50.3.

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.