Manufacturing Purchasing Managers Index (PMI)
Source: CMIE Economic Outlook, 1 Finance Research
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What does the Manufacturing Purchasing Managers Index (PMI) represent?
- The Manufacturing Purchasing Managers Index (PMI) for India, available on a monthly basis, reflects the private sector activity in manufacturing.
- The PMI data is based on a survey of purchasing managers, derived from surveying senior executives in the private sector on a monthly frequency, and covers areas such as new orders, production levels, supplier deliveries, inventories, and employment.
What is the significance of the Manufacturing Purchasing Managers Index (PMI) ?
- The PMI provides timely insights into the conditions and forthcoming trends in the manufacturing sector, which is a significant component of the Indian economy.
- As a leading indicator, the PMI offers an understanding of supply chain dynamics and operational challenges within the sector, which is used to understand the current business conditions and helps in formulating business strategies.
How to interpret Manufacturing Purchasing Managers Index (PMI) data?
- The PMI is typically measured on a scale from 0 to 100. An index value above 50 indicates that the manufacturing sector is generally expanding. The higher the number (above 50), the stronger the expansion. Conversely, a value below 50 suggests a contraction in the manufacturing sector.
- A consistently high PMI can indicate continuous growth, while a low or falling PMI suggests a downturn, signalling potential economic challenges ahead.
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