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What is manufacturing PMI?

Manufacturing PMI

About Manufacturing PMI

What is manufacturing PMI?

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.
 

How is the manufacturing PMI derived?

The PMI is derived by sending fact-based questions to a large number of companies in the concerned sector. For manufacturing PMI, the questionnaire is sent to manufacturing companies. The questions are factual in nature and the survey is not meant for opinions, intentions, or expectations. The questions are related to 5 key variables. The variables with their weights in the index are — new orders (30%), output (25%), employment (20%), suppliers’ delivery times (15%) and stock of items purchased (10%). The surveys are conducted on a monthly basis.
 
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.
 
PMI was started for the first time by US-based Institute for Supply Management (ISM) in 1948. The Singapore Institute of Purchasing and Materials Management (SIPMM) produces the index for Singapore, while IHS Markit produces the index for 30 other countries. IHS Markit produces the PMI for India. The IHS Markit India Manufacturing Purchasing Managers’ Index measures the performance of India’s manufacturing sector. The index is derived after a survey of 500 manufacturing companies.
 
PMI is a good indicator of the economic activity in any country. Usually PMI is released before other indexes such as GDP, industrial output. PMI gives an idea about the direction the economy is taking and helps economists in predicting the manufacturing activity in the country. The manufacturers and suppliers use the index to decide on their production needs based on new orders in the coming months. The index also helps investors who are looking to invest in the stock markets as it helps in determining the economic health of the country.

Latest Updates on Manufacturing PMI

16-yr high: At 59.1 in March, India's manufacturing PMI highest since 2008

2 min read Last Updated :Apr 02 2024 | 11:05 AM IST
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Manufacturing boost propels business activity to 8-month high in March

3 min read Last Updated :Mar 21 2024 | 11:22 PM IST
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Feb manufacturing PMI rises to 56.9 on increased production, new orders

2 min read Last Updated :Mar 01 2024 | 10:48 AM IST
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India's Feb business activity accelerates to 7-month high on solid demand

2 min read Last Updated :Feb 22 2024 | 10:44 AM IST
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India's manufacturing PMI rises to four-month high of 56.5 in January

2 min read Last Updated :Feb 01 2024 | 10:52 AM IST
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China's factory activity expands on export order boost, shows survey

2 min read Last Updated :Feb 01 2024 | 8:40 AM IST
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India business growth at four-month high in January, shows survey

2 min read Last Updated :Jan 24 2024 | 12:06 PM IST
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India's manufacturing PMI declines to 54.9 to hit 18-month low in Dec

3 min read Last Updated :Jan 03 2024 | 10:09 PM IST
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India's manufacturing PMI rises to 56 in November on easing prices

3 min read Last Updated :Dec 01 2023 | 11:14 PM IST
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Manufacturing PMI at eight-month low in October due to decline in demand

3 min read Last Updated :Nov 01 2023 | 10:44 PM IST
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India's October manufacturing PMI slips to 55.5, lowest in eight months

2 min read Last Updated :Nov 01 2023 | 4:20 PM IST
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September PMI manufacturing comes at 57.5, slowest expansion in 5 months

2 min read Last Updated :Oct 03 2023 | 10:50 AM IST
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India manufacturing PMI grows to three-month high in August: S&P Global

3 min read Last Updated :Sep 01 2023 | 11:26 PM IST
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India's manufacturing PMI jumps to 58.6 in August, hits 3-month high

2 min read Last Updated :Sep 01 2023 | 11:01 AM IST
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India manufacturing PMI softens in July to three-month low: S&P Global

3 min read Last Updated :Aug 01 2023 | 10:57 PM IST
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India's services PMI falls to 58.5 in June, lowest in three months

2 min read Last Updated :Jul 05 2023 | 10:44 AM IST
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India's manufacturing PMI softens slightly to 57.8 in June from 58.7 in May

3 min read Last Updated :Jul 03 2023 | 12:13 PM IST
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PMI manufacturing: Factory output drops to 57.8 in June from 58.7 in May

2 min read Last Updated :Jul 03 2023 | 10:55 AM IST
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Sensex ends above 65,000, Nifty 19,300 for the first time; RIL zooms 2.5%

1 min read Last Updated :Jul 03 2023 | 4:12 PM IST
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Global manufacturing sputters with ongoing shift toward services spending

2 min read Last Updated :Jun 12 2023 | 2:55 PM IST
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