The Purchasing Managers' Index (PMI) is an economic indicator derived from monthly surveys of private sector companies. It reflects the prevailing direction of economic trends in manufacturing and services sectors.
| PMI Type | Sector Covered |
|---|---|
| Manufacturing PMI | Factories, industrial output |
| Services PMI | Banking, IT, hospitality, etc. |
| Composite PMI | Weighted average of Manufacturing & Services PMI |
Based on responses to 5 key components from a survey of purchasing managers:
Each component is assigned a weight, and the PMI is calculated as a diffusion index.
| PMI Value | Economic Signal |
|---|---|
| > 50 | Expansion in economic activity |
| = 50 | No change (neutral) |
| < 50 | Contraction in activity |
Higher the value above 50, stronger the expansion.
Example
If India’s Manufacturing PMI rises from 52.0 to 55.5 in a month:
| Aspect | PMI | IIP / GDP |
|---|---|---|
| Frequency | Monthly | IIP (monthly), GDP (quarterly) |
| Timeliness | Very timely (early signal) | Often delayed |
| Based On | Survey (perception-based) | Actual data (fact-based) |
| Sector Coverage | Manufacturing/Services | Entire economy (incl. agri.) |
Ask Anything, Know Better
1 day ago SUMMARY India's services sector sustained robust growth in May 2025, with the HSBC India Services Purchasing Managers' Index (PMI) edging up to 58.8 from April's 58.7, marking nearly four consecutive years above the 50-point threshold that indicates expansion. WHAT IS PMI INDEX? CLICK HERE This growth was driven by strong new business inflows, attributed to advertising efforts and repeat clientele, as well as a significant surge in export orders, one of the largest in the survey's...
2 days ago SUMMARY The article "Towards an Indian Growth Model" from The Hindu Business Line advocates for a development strategy tailored to India's unique strengths and challenges, moving beyond traditional Western economic models. Key points include Domestic Demand-Driven Growth: India's economy has been significantly propelled by domestic consumption, accounting for 64% of its GDP, surpassing figures in Europe, Japan, and China. This consumption-led approach has fostered a robust middle...
6 days ago SUMMARY India has officially overtaken Japan to become the world's fourth-largest economy, marking a significant milestone in its economic ascent. Key Highlights GDP Milestone: India's nominal GDP has reached approximately $4.187 trillion for the fiscal year 2025–26, slightly surpassing Japan's $4.186 trillion, according to IMF projections. Rapid Growth: In the January–March 2025 quarter, India's economy grew by 7.4% year-on-year, exceeding expectations and...
6 days ago SUMMARY India's GDP growth for the fourth quarter of FY2024–25 is projected to be around 7%, driven by robust rural demand, increased government spending, and improved agricultural output. However, the full fiscal year growth is expected to settle at approximately 6.3%, slightly below earlier estimates. Q4 FY2024–25 Growth Estimates Reuters projects 6.7% growth, citing stronger rural consumption and state expenditure, despite subdued private investment. ICRA estimates...
May 27 SUMMARY NITI Aayog, in collaboration with the Administrative Staff College of India (ASCI), has released a comprehensive report titled “Designing a Policy for Medium Enterprises.” This initiative aims to bolster India's medium-sized enterprises (MEs), which, despite constituting only 0.3% of registered MSMEs, contribute significantly to exports, employment, and research and development. KEY HIGHLIGHTS Disproportionate Contribution: Medium enterprises account for nearly 40% of MSME...
November 20 The PLI scheme or Production Linked Incentive scheme is a scheme that intends to give companies cash incentives as they gradually increase their sales of products manufactured in domestic units from a given base year. The scheme was first introduced in March 2020. The scheme shall extend an incentive of 4% to 6% on incremental sales (over base year) of goods manufactured in India and covered under target segments, to eligible companies, for a period of five (5) years subsequent to the base year as...
March 23 Index of Industrial Production (IIP) is an index that indicates the performance of various industrial sectors of the Indian economy. It is a composite indicator of the general level of industrial activity in the economy which measures the volume of production that takes place in the country every month. Based on the performance measured every month, a general increase or decrease in the industrial activity can be measured. It is compiled and published monthly by the National Statistical Office (NSO), Ministry...
March 03 As per the recent reports, Q3 of FY 2022-23 has experienced lower growth rate than the previous quarters. GST collection is also 5% lower in February than in January. Look at the catalogues for more details.
March 01 Indian GDP is now ranked 5th in the world. See how this has increased over the time period.
January 02 Dainik Bhaskar - भारत की मैन्युफैक्चरिंग एक्टिविटी में 2 सालों में सबसे ज्यादा सुधार हुआ है। इस बात की जानकारी S&P ग्लोबल PMI डेटा में दी गई है। PMI डेटा के अनुसार, दिसंबर महीने में मैन्युफैक्चरिंग PMI बढ़कर 57.8 हो गया है, जो...
Comments
Write Comment