Manufacturing activity outperforms both the flash and the consensus in January. At 46.6, the final PMI was 0.5 points above its flash estimate, this suggests that while the reading is still below the 50-expnaion threshold by quite a bit, the latter half of January still outperformed the earlier half of the month. Despite this, the manufacturing PMI for January sits 3.4 points below the 50-expansion threshold.

The best-performing countries were Greece (52.8), Spain (50.9) where growth was at least positive. However, the Netherlands (48.4), Italy (46.3), Austria (45.7), Germany (45.0), and France (45.0) all saw fresh contractions.

Factory output for the Eurozone continues to deteriorate at 47.1. Still, this marks an 8-month high and is a much-needed improvement from December's 44.3. Factory employment remained contracted in January, extending the period of job loss to 20 consecutive months. Operating costs showed a renewed increase with input costs rising for the first time since August 2024. However, the rate of inflation was modest and below the historical average. Output prices remained unchanged as firms did not pass on the higher costs to their clients. This ended the 4 months run of discount prices. Business optimism increased to a new high last seen in February 2022.

Today's update puts the Eurozone RPI at 13 and the RPI-P at 13. Overall economic activity in general is slightly outperforming market expectations.

The call is no revision from the flash at 46.1.

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.