Purchasing Managers’ Index – PMI
Overview: The Purchasing Manager’s Index (PMI) is an indicator of economic health for the manufacturing and service sectors. The purpose of PMI is to provide information about current business conditions to company decision-makers, analysts, and purchasing managers. The PMI is very important, not only for servicing but also for the economy as a whole. The magic number is 50. A reading of 50 or higher generally indicates that the industry is expanding. This is based on Nikkei/IHS Markit Survey Report. In the USA it is prepared by ISM.
Services PMI:* The PMI Services decreased to 55.5 in July 2022 from 59.2 in June 2022.
* It shows weakest expansion in the sector since March.
Price Inflation:* On the price front, input price inflation eased to the slowest pace in five months.
* Meanwhile, output cost inflation slowed from June’s near five-year peak, the latest rise was solid and the seventeenth in successive months.
* India’s services growth eases to 4-month low in July on inflation pressure, weak demand.
Employment:Employment increased fractionally and broadly similar to June.
Manufacturing PMI:* PMI increased to 56.4 in July 2022 from 53.9 in June 2022.
* This is above market consensus of 55.1, indicating a stronger growth in overall business conditions across the sector.
InputPrices:Input prices continued to rise due to higher prices amid a second consecutive improvement in supplier performance.
New Export Orders:New orders grew substantially, and new export orders rose at a moderate pace.
Employment:Employment rose marginally, and broadly similar to those seen in the current five- month sequence of growth, amid a lack of pressure on operating capacity.
- PMI stands for Purchasing Managers’Index.
- PMI is one of the closely watched indicators of business activity across the world.
- The magic number is 50. A reading of 50 or higher generally indicates that the industry is expanding.
- Share of manufacturing sectorin GDP in India is nearly 17%.
- Share of service sector in GDP in India is nearly 54.15%.
- The PMI is prepared by IHS Markit.
- PMI was first preparedby ISM USA in 1948.