Economic Activity is on accelerated mode !
According to Nikkei Manufacturing Purchasing Managers’ Index (PMI), compiled by IHS
Markit, India’s manufacturing growth jumps to six-month high in June 2018.
According to Nikkei Manufacturing Purchasing Managers’ Index (PMI), compiled by IHS
- 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.
