The S&P Global US Manufacturing Purchasing Managers' Index declined to 52.0 in September, compared to 53.0 in August, but matched expectations in the Econoday survey of forecasters. Tariffs continue to act as a drag on exports affecting production and new orders while also driving costs higher.

Tariffs and broader policy uncertainty also dampened firms' assessment of the business outlook, the report said, [c]ost pressures meanwhile were again elevated, with tariffs reportedly the dominant factor pushing up overall purchase prices.

It also noted that while companies want to pass on the higher supplier costs to clients, competitive pressures and signs of faltering demand acted as a dampener on output charge inflation which eased to an eight-month low.

Meanwhile, input cost inflation weakened from August, but remained elevated on a historical basis.

On the plus side, an upbeat outlook encouraged manufacturers to take on additional staff, with several anticipating an increase in sales over the next 12 months.

In some instances, tariffs were seen as driving an expansion of domestic focused industrial output, it said. Overall business activity expectations subsequently improved slightly compared to August.

The consensus sees no revision from the flash at 52.0 in September, down from 53.0 in August final, indicating continued slow expansion, rather different from the ISM which is showing contraction.

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.