Purchasing Managers’ Index (PMI): All you need to know It helps decide on production needs based on new orders in the coming months
1.PMI is a lead economic indicator computed on the basis of data from different companies.
2.It is computed on the basis of survey of employment, new orders, production, inventory levels and supplier deliveries.
3.This index helps in determining whether the market conditions, as seen by purchasing managers, is expanding, contracting or staying the same.
4.The PMI above 50 indicates an expansion compared to the previous month; below 50 PMI indicates contraction; and stable at 50.
5.The PMI gives an idea about the direction of economy. It helps decide on production needs based on new orders in the coming months.
Content on this page is courtesy Centre for Investment Education and Learning (CIEL).
Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.
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This story originally appeared on: India Times - Author:Faqs of Insurances
