Context:
Manufacturing growth eased in June as per S&P Global India Manufacturing Purchasing Managers’ Index (PMI) when compared to May 2023.
About PMI:
- Survey-based economic indicator
- Designed to provide a timely insight into business conditions both the manufacturing and service sectors.
- Compiled by: S&P Global (formerly Markit Economics and prior to that NTC Research) for more than 40 economies worldwide.
- Aim: To provide information about current and future business conditions to company decision makers, analysts, and investors.
- Calculated separately for the manufacturing and services sectors and then a composite index is also constructed.
What is a composite PMI?
A composite PMI is the weighted average of manufacturing and service sector PMIs for a given geography or economy, produced by S&P Global.
- The PMI is a number from 0 to 100.
- A reading above 50 means expansion, while a score below 50 denotes contraction.
- A reading at 50 indicates neutral.
- If the PMI of the previous month is higher than the PMI of the current month, it represents that the economy is contracting.
- It is usually released at the start of every month.
- Other national PMI surveys: ISM (United States), DIFL (Denmark), IVEY (Canada) and SIPP (Singapore).
What is a flash PMI?
Flash PMI data are early estimates of the company’s final PMI numbers which are published approximately one week before final PMI data each month.
Source: The Hindu