Purchasing Managers' Index (PMI): Indicator of Economic Activity

Category: Economy / Macroeconomics

  • PMI stands for Purchasing Managers' Index.
  • It is a survey-based indicator used to assess business activity in sectors such as manufacturing and services.
  • A PMI reading above 50 generally indicates expansion compared with the previous month.
  • A reading below 50 generally indicates contraction.
  • It considers variables such as new orders, output, employment, supplier deliveries and inventories.
  • PMI is a high-frequency economic indicator and can provide an early indication of changing economic conditions.

Key Pointer: PMI → Survey-based → 50 = threshold → >50 expansion → <50 contraction