Half Empty Or Half Full Manufacturing Surveys?
As it happens, both interpretations were right-though the "half empty" crowd slightly more so. The reason for that is that we know this means for certain (assuming the surveys are correct. But if they're not correct, then that diminishes the "half-full" interpretation just as much) continued significant contraction.
The case for the "half full" interpretation lies in that this could (with emphasis on could) be the first step towards a recovery. Rarely, if ever, do these indexes go from say 35 to 55 in a month. Instead, during shifts from expansion to contraction and vice versa, they move gradually a few points up or down. So this moderate uptick is exactly what we would expect to see if this was the beginning of the end of the slump. And that is what the case for the "half full" interpretation lies in. The problem is that while we know a index value of 35 implies contraction, we don't know for certain whether an index movement from 32 to 35 is the beginning of a recovery, or a false signal that will be followed by a decline back down to 32 again. Thus while a recovery will almost necessarily be reflected in a moderate uptick, it is not equally certain that a moderate uptick really reflects a recovery. We'll have to wait for coming reports to see this.