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 |
| Definition | It is a private survey-based measure that asks respondents about changes in their perception of key business variables compared to the previous month |
| Purpose | Provides information about current and future business conditions for decision-makers, analysts, and investors |
| Calculation | Calculated separately for manufacturing and services sectors, then a composite index is constructed |
| Range | 0 to 100 (Score above 50 indicates expansion, below 50 denotes contraction, and 50 indicates no change) |
| Period | Released at the start of every month |
| By | Published by Japanese firm Nikkei but compiled by IHS Markit for over 40 economies worldwide |
| Significance | Widely 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 |
