PMI Shot Up Eight Year High

Published on February 05, 2020
Current context: Manufacturing PMI (Purchasing Manager’s Index) for January 2020 recorded 55.3 against 52.7 in December 2019.
PMI Shot Up Eight Year High
  • Purchasing Managers' Indexes (PMI) are economic indicators derived from monthly surveys of private sector companies and denotes the prevailing direction of economic trends in manufacturing.
  • The three principal producers of PMIs are:
    1. The Institute for Supply Management (ISM)
    2. The Singapore Institute of Purchasing and Materials Management (SIPMM)
    3. The Markit Group
  • This survey is conducted by IHS Markit which tracks around 400 manufacturers.
  • Manufacturing sector growth in India continued to strengthen in January, with operating conditions improving at a pace not seen in close to eight years.
  • As per the HIS Markit, India Services Business Index rose to 55.5 in January 2020 from 53.3 in December 2019 for Service sector making services activity hit seven years high in January.
  • A figure above 50 indicates expansion and anything below 50 indicates a contraction of the economy.
  • This is 30th consecutive month in which the score has been above 50points.

Question: 

Q.1 A figure above 50 in the Manufacturing PMI (Purchasing Manager’s Index) indicates _____________ and anything below 50 indicates ____________ of economy.
a. Expansion, Contraction
b. Contraction, Expansion
c. Expansion, No change
d. No change, Contraction

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