The final manufacturing PMI report reveals a slight easing in Germany's manufacturing downturn last month, though the sector remains firmly in contraction. The PMI rose to 43.0, slightly above the 42.6 flash estimate, September's final 40.6 and a 3-month high. There were smaller declines in output, new orders, and employment. However, intense competition led firms to cut output prices further, as companies sought to secure limited demand by passing on cost savings from lower input prices. While production and new orders continued to fall, the pace of contraction lessened, especially in international sales, which recorded the least significant drop in five months.

Even so, stock depletion and employment cuts persisted, with businesses remaining cautious amidst economic and political uncertainty, compounded by challenges in the automotive and construction sectors.

Looking ahead, confidence remains low, although there was a slight improvement in outlook compared to September. Still, today's update puts the German RPI at 49 and the RPI-P at 46, both measures at least showing economic activity in general running well ahead of market expectations.

No change from the flash 42.6 reading is the call for the German PMI manufacturing final.

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 500 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 data are released by 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 Markit 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.