The November Manufacturing PMI highlights continued struggles in Germany's manufacturing sector, with the final PMI holding steady at 43.0, a couple of ticks below the flash estimate and well short of the 50.0 growth threshold. Although the pace of decline in output and new orders slowed, it remains significant. Employment, purchasing activity, and stock levels fell more sharply, reflecting persistent challenges in demand and production needs.

The sector's struggles are compounded by weak export sales, particularly in the investment goods sector, and a destocking cycle driven by cost-cutting and improved material availability. Input costs continued to decline amid competitive pressures, yet factory gate prices fell at one of the fastest rates in 15 years, indicating limited pricing power.

Business sentiment improved marginally, supported by hopes of an economic recovery after upcoming elections. However, optimism remains subdued due to ongoing political and economic uncertainties. The latest data put the German RPI at minus 40 and the RPI-P at minus 33. This means that economic activity in general is falling well short of market expectations.

Forecasters look for no revision in the final report from the flash at a gloomy 43.2.

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.