PMI (Purchasing Managers Index)Back to Glossary
The purchasing managers’ index is a highly valued leading indicator that keeps track of the ongoing sentiment of a large number of purchasing managers in US construction, manufacturing and services. It is assembled by conducting surveys that ask respondents to characterize business conditions in their relevant sectors by looking specifically at new orders, deliveries and inventories as well as employment prices and production levels. It is provided as a figure between 50 and 100. Below 50 indicates a sector in contraction, above 50 is considered evidence of a sector that is expanding. PMI is important because it’s a leading indicator. In other words the changes it reports are evident in this dataset before they are felt by the broader economy.
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