Purchasing Managers’ Index

Purchasing Managers’ Index Latest News

According to recent data, India’s manufacturing activity slowed to a 45-month low in March, with the HSBC India Manufacturing Purchasing Managers’ Index falling to 53.9 from 56.9 in February.

About Purchasing Managers’ Index

• It is an indicator of business activity — both in the manufacturing and services sectors.
• It is a survey-based measure that asks the respondents about changes in their perception of some key business variables from the month before.
• It is calculated separately for the manufacturing and services sectors and then a composite index is constructed.
• The index helps in determining whether the market conditions, as seen by purchasing managers, is expanding, contracting or staying the same. 
• There are two types of PMI — Manufacturing PMI and Services PMI.

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How is the Manufacturing PMI Derived?

• It is derived by sending fact-based questions to a large number of companies in the concerned sector.
• The questions are related to 5 key variables— new orders, output employment, suppliers’ delivery times and stock of items purchased
• The surveys are conducted on a monthly basis.
• The Purchasing Managers’ Index can range between 0 and 100, with a number over 50 citing expansion and under 50 noting contraction.

Source: TH