Purchasing Manager’s Index (PMI)

* Purchasing Manager’s Index is an indicator of business activity- in the manufacturing and services sectors.
* It is a survey-based measure that asks the respondents about changes in their perception about key business variables as compared with the previous month.
*It is calculated separately for the manufacturing and services sectors and then a composite index is constructed. 
*The PMI is a number from 0 to 100. 
* PMI above 50 represents an expansion when compared to the previous month;
*PMI under 50 represents a contraction,and
*A reading at 50 indicates no change.
*If PMI of the previous month is higher than the PMI of the current month it represents that the economy is contracting.
* The PMI is usually released at the start of every month. It is, therefore, considered a good leading indicator of economic activity.