Manufacturing activity was revised just marginally weaker in the final data for May. At 47.3, the updated reading was just 0.1 point below its flash estimate and still a tidy 1.6 points above its final mark at the start of the quarter.

Production continued to contract but only just as the sub-index (49.3) climbed to a 14-month high. New orders fell again but by the least in two years and, similarly, a drop in backlogs was the most shallow since August 2022. Employment was trimmed further amid evidence of ongoing surplus capacity but only matched April's modest decrease. Looking ahead, businesses were more optimistic about the coming 12 months and sentiment reached its highest level since February 2022. Input costs fell again, albeit only fractionally, and factory gate prices were also cut.

In terms of national PMIs, the best performing country was Greece (54.9) which, alongside Spain (54.0) and the Netherlands (52.5), was above the 50-growth threshold. France (46.4), Austria (46.3), Italy (45.6) and Germany (45.4) all made progress but remained well below 50.

The minimal revision to the flash data leaves some cautiously optimistic signals for Eurozone manufacturing. Demand will need to pick up more meaningfully for the sector to make any real progress, but signs of stabilisation bode well, and output growth should be positive over the second half of the year. Meantime, declining inflation pressures further increase the likelihood of a cut in ECB interest rates on Thursday. Today's update puts the Eurozone RPI at 11 and the RPI-P at minus 2. Broadly speaking, overall economic activity is moving in line with market forecasts.

No revision is expected to the flash data leaving the headline index at 47.4, up from April's final 45.7.

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.