South Korea's manufacturing PMI showed expansion in the sector for the fourth consecutive month in August after contraction earlier in the year, with the survey's headline index picking up to 51.9 from 51.4 in July. Respondents reported improved current conditions and more subdued price pressures and also have greater confidence about the outlook.

Survey respondents reported bigger increases in output and new orders in August but a smaller increase in new export orders, with respondents reporting weaker demand from the US and China. Respondents also reported a fourth consecutive increase in payrolls and are more confident about the outlook for output growth over the next 12 months, with some citing new product launches as a factor likely to boost sales. The survey shows a smaller increase in input costs and only the smallest increase in selling prices so far this year.

The Purchasing Managers' Manufacturing Index (PMI) is based on monthly questionnaire surveys of selected companies which provide an advance indication of what is really happening in the private sector economy by tracking changes in variables such as output, new orders, stock levels, employment and prices across the manufacturing sectors.

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 purchasing managers' manufacturing indexes, 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 Markit 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.