Purchasing Managers’ Index

About:

• It was the 15th straight month the figure was above the 50-mark separating growth from contraction. 
• The survey pointed out that Indian businesses become more confident in the outlook as inflation worries were tamed.
• The overall level of positive sentiment seen in September was the best in over seven-and-a-half years, according to the survey. 

Purchasing Managers’ Index

• Purchasing Managers’ Index or PMI is an economic indicator, which is derived after monthly surveys of different companies.
• The index shows trends in both the manufacturing and services sector.
• The index helps in determining whether the market conditions, as seen by purchasing managers, is expanding, contracting or staying the same.
• It is used to provide information regarding the current and future business conditions.
• PMI is one of the closely watched indicators of business activity and helps in predicting the economic health of a country.
• There are two types of PMI — Manufacturing PMI and Services PMI. A combined index is also made using both manufacturing PMI and services PMI.
• A PMI number greater than 50 indicates expansion in business activity. A number less than 50 shows contraction. The rate of expansion is also judged by the difference from the mid-point (50) and also by previous month’s data.

Source : Mint

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