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 Manufacturing PMI

Facts for Prelims (FFP)

Source: IE

 

Context: India’s manufacturing sector expanded at a three-month high driven by resilience in demand, growth in factory orders and easing input cost pressure.

PMI (Purchasing Managers’ Index)Description
DefinitionIt is a private survey-based measure that asks respondents about changes in their perception of key business variables compared to the previous month
PurposeProvides information about current and future business conditions for decision-makers, analysts, and investors
CalculationCalculated separately for manufacturing and services sectors, then a composite index is constructed
Range0 to 100 (Score above 50 indicates expansion, below 50 denotes contraction, and 50 indicates no change)
PeriodReleased at the start of every month
ByPublished by Japanese firm Nikkei but compiled by IHS Markit for over 40 economies worldwide
SignificanceWidely followed as an indicator of economic health, a high PMI reading is seen as positive, low PMI reading is seen as negative for overall economic performance