UPSC Current – Purchasing Managers’ Index (PMI)
Purchasing Managers’ Index (PMI)
Tags: GS 3, Growth & Development
- Why in News
- Purchasing Managers’ Index (PMI) rose from 56.8 in September to 58.9 in October.
- India’s manufacturing sector activity improved for the third straight month in October.
- PMI or a Purchasing Managers’ Index (PMI) is an indicator of business activity — both in the manufacturing and services sectors
- It is a survey-based measures 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.
- Reading of PMI
- PMI above 50 means an expansion
- PMI below 50 means contraction
- PMI 50 means no change
- The Rate of expansion or contraction is also judged by comparing PMI with the previous month data.
- The PMI is usually released at the start of the month. It is, therefore, considered a good leading indicator of economic activity.
- The PMI also gives an indication of corporate earnings and is closely watched by investors as well as the bond markets.