Managers Index – Manufacturing
Most major economies have purchasing managers indices (PMI) released
monthly. They are compiled by various organizations. Some focus on the
manufacturing sector while others measure the service sector. They are a
very current measure of the economic health of the manufacturing or
services sector. The PMI indices are usually based on five major
indicators: new orders, inventory levels, production, supplier
deliveries and the employment environment.
A PMI of greater than 50 represents expansion, compared to the previous
month. A reading under 50 represents a contraction, while a reading at
50 indicates no change.
We find the PMI indices to be useful predictors of future economic