Manufacturing activity was slightly weaker than originally thought in May. The flash sector PMI was revised down 0.3 points and at 46.4, now stands only 1.1 points above its final level in April. The negative revision confirms another dismal month for French manufacturing.

New orders continued to decline in both the domestic and overseas markets, prompting a further drop in output. Indeed ,the latter has now decreased every month in the last two years. The fall here would have been steeper but for backlogs which were again pared. Predictably, headcount was also trimmed further and at a slightly faster pace than in April, but, despite this, business confidence rose to its highest level since the start of the war in Ukraine.

Inflationary pressures picked up slightly and higher input costs for a second successive month saw output prices increase for the first time in a year.

In sum, French manufacturing remained in the doldrums and, despite improving sentiment, weak demand suggests it will be a drag on GDP growth for some time yet. Today's update puts the French RPI at minus 45 and the RPI-P at minus 35, both measures showing economic activity in general running well short of market forecasts.

No revision is expected to the flash data leaving the headline index at 46.7, up from April's final 45.3.

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 400 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 data are released by 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 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.