Purchasing Managers’ Index (PMI)
The Purchasing Managers’ Index (PMI) is an economic indicator used to measure the health of the manufacturing sector. It is based on a survey of purchasing managers in the manufacturing sector and provides an indication of the current state of the economy. The PMI is released monthly by the Institute for Supply Management (ISM) and is considered to be one of the most important economic indicators.
History of the PMI
The PMI was first developed in the United States in the late 1950s by the National Association of Purchasing Managers (NAPM). The NAPM was founded in 1915 and is now known as the Institute for Supply Management (ISM). The PMI was designed to provide an early indication of the direction of the economy and has since become one of the most widely used economic indicators.
The PMI is based on a survey of purchasing managers in the manufacturing sector. The survey asks questions about current business conditions, such as production levels, new orders, inventories, prices, and employment. The responses are then used to calculate a composite index, which is released monthly. A reading above 50 indicates that the manufacturing sector is expanding, while a reading below 50 indicates that the sector is contracting.
Comparison Table
| Index | Reading |
|---|---|
| PMI | Above 50 indicates expansion, below 50 indicates contraction |
Summary
The Purchasing Managers’ Index (PMI) is an important economic indicator used to measure the health of the manufacturing sector. It is based on a survey of purchasing managers in the manufacturing sector and provides an indication of the current state of the economy. The PMI is released monthly by the Institute for Supply Management (ISM) and is considered to be one of the most important economic indicators. For more information about the PMI, visit the Institute for Supply Management website.
See Also
- Consumer Price Index (CPI)
- Gross Domestic Product (GDP)
- Employment Cost Index (ECI)
- Producer Price Index (PPI)
- Retail Sales Index (RSI)
- Consumer Confidence Index (CCI)
- Housing Starts Index (HSI)
- Leading Economic Indicators (LEI)
- Business Confidence Index (BCI)
- Manufacturing Index (MI)
