Manufacturing activity deteriorated in September. At 45.0, the final reading was just 0.2 points above its flash estimate, 0.8 points below the August report and fully 5 points below the 50-expansion threshold.

The best-performing countries were Spain (53.0) and Greece (50.3) where growth was at least positive. However, Ireland (49.4), Italy (48.3), Netherlands (48.2), France (44.6), Austria (42.8) and Germany (40.6) all saw fresh contractions. In particular, Germany recorded its weakest performance in 12 months.

September's setback reflects shrinking purchasing activity and depleted inventories of both pre- and post-production items. This led to even more staff being cut with job shedding the most pronounced since October 2012, excluding pandemic-hit months.

Today's update puts the Eurozone RPI at minus 15 and the RPI-P at minus 18. Overall economic activity continues to fall short of 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). 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.