Germany's manufacturing sector showed that the PMI grew slightly from 49.5 to 49.6, signalling a slower rate of contraction in overall conditions. On the surface, production offered a bright spot, rising for the eighth straight month, driven by robust growth in investment goods.

The forward-looking signals were encouraging, with new orders having a positive influence despite the ill effects of the US tariffs. However, stocks of purchases and employment fell, keeping the manufacturing PMI below the 50.0 threshold. Export sales declined for the third month. Purchasing activity also declined, with many businesses trying to run down stocks of input in the meantime.

Delivery times lengthened for the first time in three years in September, and the increase continued in October. Despite the supply chain pressures building in Germany, German industries recorded a steeper reduction in purchase prices. This latest update takes the RPI to 22 and the RPI-P to 18, meaning that economic activities are now ahead of market expectations in Germany.

Forecasters see no change from the flash at 49.6, a rather uninspiring result.

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 500 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 Markit 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.