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Manufacturing PMI: India’s Manufacturing Growth Jumps

Published on July 03, 2018
Economic Activity is on accelerated mode !
According to Nikkei Manufacturing Purchasing Managers’ Index (PMI), compiled by IHS 

Manufacturing Purchasing Managers’ Index

Markit, India’s manufacturing growth jumps to six-month high in June 2018.
  • Manufacturing PMI rose to 53.1 in June 2018 from 51.2 in May 2018, the highest since December 2017.
  • It must be noted that this is the 11th consecutive month that the manufacturing PMI remained above the 50-point mark.
  • The reading above 50 on index denotes expansion and less than that indicates contraction in activities.

What is the Purchasing Managers’ Index (PMI):

  • PMI is an indicator of business activity-both in the manufacturing and services sectors.
  • It is a survey-based measure that asks respondents about changes in their perception of some key business variables from month before.
  • It is calculated separately for manufacturing and services sectors and then composite index is constructed.

Why is the PMI important for the economy?

  • PMI is usually released at the start of the month, much before most of official data on industrial output, manufacturing and GDP growth is made available.
  • It is, therefore, considered as good leading indicator of economic activity.
  • Manufacturing growth measured by PMI is considered good indicator of industrial output.

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