The S&P Global US Manufacturing Purchasing Managers' Index came in at 50.2 in March, down from 52.7 in February, but above expectations for 49.8 in the Econoday survey of forecasters. New orders expanded only modestly, even as exports stabilized.

Confidence in the outlook softened again in February, dropping for a second successive month to its lowest level since December, the report said. Market uncertainty was also frequently reported, linked to concerns over tariff implementation and federal government policies.

This served to weigh on new order book growth, which was modest overall in March and the lowest of the year so far, it added.

There were also efforts to meet orders before any tariff implementation, with new export orders stabilizing after nine months of contraction.

In terms of the likely inflationary impact of the coming higher customs duties, S&P Global also highlighted evidence that some suppliers were already adjusting their prices upwards in direct response to tariffs.

Overall, input price inflation spiked higher in March, hitting its highest level since August 2022, it said. The steep increase in input prices fed through to a greater rise in manufacturing selling prices during March. Latest data showed that output price inflation picked up for a fourth successive month to a 25-month high.

Forecasters expect the March final unchanged from 49.8 in the flash, and down from 52.7 in February.

Based on monthly questionnaire surveys of selected companies, the Purchasing Managers' Manufacturing Index (PMI) offers an advance indication on month-to-month activity in the private sector economy by tracking changes in variables such as production, new orders, stock levels, employment and prices across manufacturing industries. The final index for the current month is released roughly a week after the flash.

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 in the U.S. and 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 Markit 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.

Markit originally began collecting monthly Purchasing Managers' Index (PMI) data in the U.S. in April 2004, initially from a panel of manufacturers in the U.S. electronics goods producing sector. In May 2007, Markit's U.S. PMI research was extended out to cover producers of metal goods. In October 2009, Markit's U.S. Manufacturing PMI survey panel was extended further to cover all areas of U.S. manufacturing activity. Back data for Markit's U.S. Manufacturing PMI between May 2007 and September 2009 are an aggregation of data collected from producers of electronic goods and metal goods producers, while data from October 2009 are based on data collected from a panel representing the entire U.S. manufacturing economy. Markit's total U.S. Manufacturing PMI survey panel comprises over 600 companies.