| Actual | Previous | |
| Index | 52.1 | 50.3 |
Highlights
The S&P Global China manufacturing PMI showed stronger conditions in the sector in February, with the headline index increasing to 52.1 from 50.3 in January. This is the hihglest level for the index since December 2020. In contrast, official PMI survey data, also published today, showed further contraction in the sector in February.
Respondents to the S&P PMI survey reported improved output and new orders in February, while new export orders were also reported to have increased sharply after recent weakness. The survey shows a small increase in payrolls while its measure of business confidence rose to its highest level in nearly a year. The survey also shows input costs rose at a faster pace while selling prices were also increased atthe fastest pace in 15 months.
Definition
The S&P Manufacturing Purchasing Managers' Index (PMI) is based on monthly a questionnaire that surveys of over 500 companies which provide an advance indication of what is really happening in the private sector economy by tracking changes in variables such as output, new orders, stock levels, employment and prices across the manufacturing sectors.
Description
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 purchasing managers' manufacturing indexes, 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 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.