Purchasing Manager’s Index (PMI)

By Amigos IAS

Why is it in the news?

  • The S&P Global India Manufacturing Purchasing Managers’ Index (PMI) dropped to 57.5 from 58.6 in August.

Purchasing Managers’ Index (PMI): An Economic Indicator

  • The Purchasing Managers’ Index (PMI) is a crucial economic indicator that provides insights into the prevailing direction of economic trends in both the manufacturing and service sectors.
  • It is derived from monthly surveys conducted among various companies to gauge their economic activities.

Types of PMI

  • Manufacturing PMI
  • Services PMI
  • Combined Index (Manufacturing and Services PMI)


  • Compiled by IHS Markit.
  • Panel of approximately 400 manufacturers surveyed.
  • Survey responses collected in the second half of each month.
  • Indicates the direction of change compared to the previous month.

Calculation of PMI

  • PMI is represented on a scale of 0 to 100;
  • Above 50 indicates expansion;
  • Below 50 denotes contraction;
  • A reading of 50 signifies no change; and
  • A decrease from the previous month suggests economic contraction.


  • To provide information about current and future business conditions.
  • Target audience includes company decision-makers, analysts, and investors.
  • Helps assess whether market conditions, as perceived by purchasing managers, are expanding, contracting, or remaining stable.
About IHS Markit
  • A London-based global leader in information, analytics, and solutions.
  • Focuses on major industries and markets that drive worldwide economies.

Signup for newsletter

Receive notifications straight into your inbox

Leave a comment