The UK manufacturing index, at 52.5 is at a 26-month high. It remains unchanged when compared to both the August flash estimate and the consensus while being 0.4 points above July (52.1).

The PMI posted above the 50-growth threshold indicating expansion of the industry. The increase in output and new orders led to higher employment. Input costs remained high due to expensive raw materials, however, the outlook for the UK manufacturing sector remains mostly positive with 61 percent of companies forecasting that production would be higher one year from now. This positivity was linked to new client wins, product launches, efforts to open up new markets, promotional activity and hopes for economic recovery.

The latest results put the UK RPI at minus 18 and the RPI-P at minus 13. Overall economic activity is falling behind market expectations.

No revision is expected to the flash estimate.

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.