At 52.1 the manufacturing PMI for the UK is 0.3 points above the flash estimate (51.8) and 1.2 points above the previous month (50.9). This remains the highest it has been since July 2022. For the past 3 months, the PMI has remained above the 50-growth threshold, also the best run since mid-2022.

Four out of the five PMI components saw an improvement in overall operating conditions. Expansions were seen in output, new orders, and employment. Average vendor lead times also continued to lengthen due to supply-chain constraints (Red Sea crisis). Companies linked output growth to new product launches, efforts to clear backlogs of work, and improved intakes of new business.

However, inflation remained high with input prices rising and driving costs to a one-and-a-half-year high. Market forces and freight issues were also pushing up costs at several firms. This led to higher selling prices, which rose for the ninth month running. The quickest pace since May 2023.

Today's update puts the UK RPI at minus 16 and the RPI-P at minus 23. Overall economic activity is falling behind market expectations

No revisions are expected to the flash report leaving the sector PMI at 51.8, up from June's final 51.4.

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.