The final UK manufacturing PMI was 48.3, up from the flash estimate of 48.2 and December's final of 47.0. This implies contraction in activity for the fourth consecutive month. Still, January's manufacturing PMI is an improvement from December which posted the steepest decline in 11 months.

As this was the fourth consecutive print below the 50-growth threshold, it reflected declines in output, new orders and employment. Production fell for the third month in a row. Low demand and weakened consumer confidence led to lower output in January. This was especially prevalent in the consumer goods industry meanwhile; investment and intermediate goods saw moderate growth.

New business decreased for the fourth consecutive month in January. The changes to minimum wage legislation and employer national insurance (NI) contributions announced last year might have contributed to cutbacks in non-essential expenditure at manufacturer and client level.

Business optimism remained at one of its weakest levels over the past two years, only slightly better than December's 24-month low.

January saw an uptick in purchase price inflation as it reached a two year high. The steepest rise was seen in consumer goods. Increased costs led to suppliers' raising prices to reflect the cost increases, material shortages and higher transportation costs. Supply chains remained stressed in January with shipping times lengthening due to the Red Sea crisis, backlogs at ports, container shortages and regulatory issues.

The latest results trim the UK RPI to minus 19 and the RPI-P to minus 19. Overall economic activity is falling behind market expectations.

No revision from the 48.2 flash is the call for 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 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.