In October, the flash manufacturing PMI was surprisingly revised down from 50.3 to 49.9, signalling a slight contraction and driven by a drop in new order intakes and tempered output growth. The sector, already experiencing prolonged supply chain strains, faced further uncertainty due to looming UK Budget announcements, economic slowdown, and reduced demand from both domestic and international clients. New orders, particularly exports, continued on a downward trend, marking the 33rd month of declining overseas demand, with weakened interest from Europe, China, and the U.S.

While manufacturing employment rose marginally, reflecting firms' efforts to clear backlogs, overall sentiment remained cautious. Optimism for future production posted only a slight improvement from September. However, there was relief on the cost front, as input cost inflation sharply eased, recording the steepest drop in over three decades. Despite slight increases in output charges, factory gate inflation also decelerated across consumer, intermediate, and investment goods sectors, indicating some stabilisation in pricing pressures. Persistent vendor delays, exacerbated by international crises, continued to challenge operations.

Today's update reduce the RPI to minus 34 and RPI-P to minus 16, showing economic activity in general running behind market expectations.

The consensus looks for 50.3 for the UK PMI manufacturing index versus 51.5 a month ago and 50.3 in the October flash.

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.