PMI (Purchasing Managers' Index) is an economic indicator that provides insight into the health of a country’s manufacturing and services sectors. It is based on surveys of purchasing managers in different industries and is used to gauge business conditions, such as
- New orders
- Inventory levels
- Production
- Supplier deliveries
- Employment
Scale:
PMI is measured on a scale from 0 to 100.
Above 50: Expansion in activity
Below 50: Contraction
Exactly 50: No change
Types of PMI:
Manufacturing PMI – Covers goods-producing sector
Services PMI – Covers service-oriented businesses
Composite PMI – Combines manufacturing and services
Published By:
In the US: S&P Global (formerly IHS Markit) and ISM (Institute for Supply Management)
In India: S&P Global publishes the data
It is a leading indicator—it gives early signs of economic trends
Used by central banks, analysts, and investors for:
- Interest rate decisions
- Stock market outlook
- Inflation expectations
- Business confidence
If India's Manufacturing PMI rises from 52 to 55, it means factories are receiving more orders, producing more goods, and hiring more people—signaling economic growth.