According to Nikkei India Manufacturing Purchasing Managers’ Index (PMI) data,manufacturing activity has slowed down to 51.8 in April which is lower than 52.6 in March,2019.
The prime reason for the slow growth was disruptions arising from the elections as companies may have adopted a wait-and-see approach on their plans until the public policies become clearer after the formation of a new government.
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.
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