Manufacturing PMI came in at 48.2, softening from its preliminary reading of 48.4, and only slightly higher than the June result of 48.1. Helping to keep the reading below the expansionary level of 50 was the largest decline in new factory orders since January.

Also of concern is the year-ahead outlook which is at its lowest level since February. This component had been quite resilient in previous months as businesses were evaluating current conditions unfavorably, but still were optimistic about the conditions a year out. This is no longer the case.

In France, sentiment is not only being affected by global trade uncertainty, but also around the government's austerity program. As a result, businesses are hesitant to invest.

Even while little changed from June's reading, there are ominous signs for French industry, with a marked drop in new orders reflecting weak domestic demand. At the same time, export sales also declined at their fastest pace since January. Add to that the increase in finished goods inventories of post-production products which were up for the first time since March of 2023. Inventory buildup in an environment of stagnation or contraction is a worrying sign for business activity.

There is no getting around the fact the tariff situation is starting to manifest itself in the data. Even with a 15 percent tariff agreement with the United States, uncertainty remains because that can seemingly change overnight. As a result, businesses will be hesitant to deploy capital which will further dampen activity.

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 400 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 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.