PURCHASING MANAGER INDEX
- ECONOMY
News: India’s services sector growth
softens: PMI
What's in the news?
●
India’s service sector growth eased to a five-month
low in May amid fierce competition, price pressures and a severe heatwave, even
as new orders from international markets expanded.
Purchasing Manager Index
(PMI):
●
The PMI is an indicator of the economic trends in
the manufacturing and service sectors.
●
The indicator is compiled and released monthly.
Methodology:
●
It is a survey-based
measure that asks respondents about changes in their perceptions of
important business factors over the past month.
Objective:
●
The purpose of the PMI is to provide information
about current and future business conditions to company decision makers,
analysts, and investors.
Sectors Covered:
●
It is calculated separately for the manufacturing
and services sectors and then a composite
index is also constructed.
Features:
●
The PMI is a number from 0 to 100.
●
A print above
50 means expansion, while a score below that denotes contraction.
●
A reading at 50
indicates no change.
It is usually released at the start of every month. It is, therefore,
considered a good leading indicator of
economic activity.
Focus Areas:
Purchasing Managers Index (PMI) focuses mainly on the five major survey areas:
●
Employment
●
New orders
●
Production
●
Inventory levels
●
Supplier deliveries