Purchasing Managers Index (PMI)
Ninad RamdasiCategories: DSIJ_Magazine_Web, DSIJMagazine_App, Letter to Editor, Letter to Editor
Your cover story on India's manufacturing sector in the most recent issue was meticulous and well-researched.
Your cover story on India’s manufacturing sector in the most recent issue was meticulous and well-researched. I agree with your view that the manufacturing sector is poised to take a big leap forward, propelled mainly by the government’s initiatives. Can you explain what is the Purchasing Managers’ Index (PMI), how it works and its significance? - Vineeta
Editor Responds: We appreciate your kind words of encouragement. To answer your query, the Purchasing Managers’ Index (PMI) is a surveybased measure that enquires about changes in respondents’ perceptions of some key business variables from the previous month. It is calculated separately for the manufacturing and services sectors before being combined to create a composite index. The PMI is typically released at the beginning of each month, well ahead of the majority of official data on industrial output, manufacturing and GDP growth. As a result, it is regarded as a good leading indicator of economic activity. Hope this helps. Keep writing to us.