At 50.0 the final PMI composite index for October signalled no change in business activity. It was 0.4 points above its September print and 0.3 points stronger than its flash estimate.

At the national level, the best-performing countries were Spain (55.2) and Ireland (52.6), Italy (51.0) all of which saw an expansion of business activities. The weaker performing countries were Germany (48.6) and France (48.1), both of which fell short of the 50-growth threshold, signalling contraction. The decline of Germany and France offset the growth seen in the other countries.

The final service PMI for September was 51.6, above both the flash estimate (51.2) and final September mark (51.4) and signalling a modest expansion. Even so, new business decreased for the second time in a row with the fall in new business from abroad being the sharpest in the last 10 months. Outstanding orders were run down to support activity and employment continued to rise. Services input costs and output charges continued to increase, although rates of inflation held close to the lows seen in September.

Today's update puts the Eurozone RPI at 29 and the RPI-P at 20 meaning that overall economic activity is moderately outperforming market forecasts.

Forecasters see the composite final unchanged from 49.7 in the flash. Services are also seen steady at 51.2 from the flash in the final reading for October.

The Composite Purchasing Managers' Index (PMI) provides an estimate of private sector output for the preceding month by combining information obtained from surveys of the manufacturing and service sectors of the economy. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) output versus the previous month and the closer to 100 (zero) the faster is output growing (contracting). The report also contains the final estimate of the services PMI. The data are provided by S&P Global using a representative sample of around 5,000 manufacturing and services companies, the former including Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece and the latter Germany, France, Italy, Spain and the Republic of Ireland.

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.