Purchasing Managers Index

  • The Purchasing Managers’ Index (PMI) is an indicator of the economic health of the manufacturing and services sector.
  • The PMI is based on five major indicators :
    • New orders,
    • Inventory levels,
    • Production,
    • Supplier deliveries and
    • Employment environment.
  • The purpose of the PMI is to provide information about current business conditions to company decision makers, analysts and purchasing managers.
    It is a survey-based measure that asks respondents about changes in their perception of some key business variables from last month
  • It is calculated separately for manufacturing and services sectors and then composite index is constructed.
  • IHS Markit compiles the index.
  • The headline PMI is a number from 0 to 100.
    • A PMI above 50 represents an expansion when compared with the previous month.
    • A PMI reading under 50 represents a contraction, and a reading at 50 indicates no change.

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