Forex glossary
Purchasing Managers' Index (PMI)
A family of survey indicators describing the direction of changes in a specified sector and country. Check the provider, components, weights and seasonal adjustment; index points are not percentage changes in output, and different reports are not interchangeable.
Illustrative example
How does it work in practice?
Assume a hypothetical PMI rises from 48 to 51 points in the same provider's sector series, with the same seasonal-adjustment method. The change is 3 index points; it does not mean the quantity of output grew by 3%.
A case to work through
Higher, still below the threshold
A fictional comparable activity diffusion index rises from 47 to 49.
- The reading increases 2 index points.
- Its level remains below neutral 50.
What follows? Do not describe this as 2% output growth.
Example boundary: Interpretation depends on the specified component, provider and method.
A useful distinction
Purchasing Managers' Index (PMI) / ISM Manufacturing PMI (United States)
ISM Manufacturing has a particular construction; PMI generally covers many series.
Check your understanding
Separate the index level from its change.
Show the answer and explanation
A higher index still below 50
Level and change are separate information.
Reading economic surveys
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Related terms
Sources and documentation
- Purchasing Managers’ Index data – FAQ – S&P Global
Provides the diffusion-index formula and distinguishes components from composite PMI measures.
Document read: - ISM Manufacturing PMI Report – August – methodology
Specifies Supplier Deliveries' distinct interpretation and five equally weighted PMI components.
Document read:
The example illustrates the mechanism. Check current account conditions and instrument specifications with the provider.