The UK manufacturing PMI rose to a 12-month high in October. At 49.7, the manufacturing PMI was 0.1 percent more than both the flash estimate and the consensus. It illustrates slower contraction compared to September, nearly reaching the 50.0 growth threshold.

Manufacturing output rose for the first time in a year, despite dwindling new orders, employment and purchasing stocks. Decline in demand was reported in both domestic and international markets. The steepest decline in demand was in investment goods production, and the slowest was in intermediate goods.

Exports have declined consistently over the last 45 months; however, this has been exacerbated by concerns over the US tariffs, rising energy costs, and client uncertainty. Orders from the US, the EU, the Middle East and Asia all fell, as the UK struggles to be competitive in the global market. Despite this, business optimism rose to an 8-month high but remained below the long-run average. Despite input cost and selling price inflation easing to a 9-month low in September, companies reported higher costs for energy, plastic, timber and foodstuffs in October.

Today's update puts the UK RPI at 14 and the RPI-P at 33. Overall, the economy in general is slightly outperforming market expectations.

The consensus sees no change from the flash at 49.6 for the 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.