Context:
India manufacturing Purchasing Managers’ Index (PMI) posts impressive growth in July
Purchasing Managers’ Index (PMI):
- Survey-based economic indicator
- Designed to provide a timely insight into business conditions in 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.
- 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.
- Usually released at the start of every month.
- Other national PMI surveys – ISM (United States), DIFL (Denmark), IVEY (Canada) and SIPP (Singapore).
Related Terms:
- Composite PMI – Weighted average of manufacturing and service sector PMIs for a given geography or economy, produced by S&P Global.
- Flash PMI data – Early estimates of the company’s final PMI numbers which are published approximately one week before final PMI data each month.
Source: Business Standard
Previous Year Question
Consider the following statements:
1. The weightage of food in Consumer Price Index (CPI) is higher than that in Wholesale Price Index (WPI).
2. The WPI does not capture changes in the prices of services, which CPI does.
3. Reserve Bank of India has now adopted WPI as its key measure of inflation and to decide on changing the key policy rates.
Which of the statements given above is/are correct?
[UPSC Civil Services Exam – 2020 Prelims]
(a) 1 and 2 only
(b) 2 only
(c) 3 only
(d) 1, 2 and 3
Answer: (a)
