Purchasing Manager’s Index

04 Oct 2023 3 mins Download PDF

Purchasing Manager’s Index

1. It is an index that reflects the prevailing direction of economic trends in the manufacturing and service sectors.
2. It has a diffusion index that summarizes whether market conditions are expanding, staying the same, or contracting as viewed by purchasing managers.
3. It is a monthly survey released by the Institute for Supply Management (ISM), of supply chain managers across 19 industries, covering both upstream and downstream activity.
4. The PMI is based on five major survey areas, all are weighed equally:
   1. New orders
   2. Inventory levels
   3. Production
   4. Supplier deliveries
   5. Employment
5. A PMI above 50 represents an expansion and under 50 represents a contraction when compared with the previous month.