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EMU: PMI Manufacturing Final
| Actual | Previous | |
| Index | 51.6 | 50.8 |
Highlights
The manufacturing sector expanded in March to an extent not seen since October 2022, despite higher input costs and increased delivery times from suppliers. The PMI rose to 51.6 from 50.8 in February.
Production as well as new orders rose in March, with export orders also increased. At the same time, order backlogs increased for the first time in nearly four years, suggesting businesses are attempting to get ahead of further price increases. Factory output rose in March for the third consecutive month.
This is borne out that even though input price inflation at its highest in nearly 3 1/2 years, purchasing is at its highest level since June 2022.
While the balance of eurozone manufacturers remained positive about growth prospects over the coming twelve months, the level reached a five-month low.
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 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). Released by S&P Global, national data are included for Germany, France, Italy, Spain, the Netherlands, Austria, the Republic of Ireland and Greece. These countries together account for an estimated 89 percent of Eurozone manufacturing activity.
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 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 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.