- According to Nikkei India Services Purchasing Managers’ Index (PMI) data, new work orders,especially international ones,helped propel manufacturing sector activity to a 14-month high of 54.3 after two straight months of contraction.
- PMI or a Purchasing Managers’ Index (PMI) is an indicator of business activity — both in the manufacturing and services sectors. It is a survey-based measures that asks the respondents about changes in their perception of some key business variables from the month before.
- The PMI is derived from a series of qualitative questions. Executives from a reasonably big sample,running into hundreds of firms, are asked whether key indicators such as (a)output (b)new orders (c)business expectations and (d)employment were stronger than the month before and are asked to rate them.
- The headline PMI is a number from 0 to 100.The figure above 50 denotes expansion in business activity.Anything below 50 denotes contraction.The rate of expansion can also be judged by comparing the PMI with that of the previous month data.If the figure is higher than the previous month’s then the economy is expanding at a faster rate. If it is lower than the previous month then it is growing at a lower rate.
2 min read