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DE: PMI Manufacturing Final
| Actual | Previous | |
| Index | 52.2 | 50.9 |
Highlights
Manufacturing PMI rose to 52.2 in March, the highest since May 2022, from 50.9 in February despite increased cost pressures, and supply chain constraints due to the Middle East conflict.
Supplier delivery times increased at their fastest rate since July of 2022, primarily on cargo originating in Asia. Still, businesses were placing new orders and increased their production in order to counteract the effects of the conflict. This could also be that businesses are expecting still higher prices and are now moving to increase inventories.
Cost pressures are also making themselves felt, with input prices increasing at their highest level since October 2022. These stem from higher energy prices, and increased transportation costs.
Nevertheless, German manufacturers' outlook for the coming twelve months was far more subdued than before the outbreak of the Middle East hostilities.
Definition
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.
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 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.