Manufacturing Purchase Index

Manufacturing Purchase Index

News: The S&P Global India Manufacturing Purchasing Managers’ Index (PMI) surged to a 31-month high of 58.7 in May, with factory orders rising at the fastest clip since January 2021.

What is PMI?
 It is a survey-based measure that asks the respondents about changes in their perception about key business variables as compared with the previous month.
 The purpose of the PMI is to provide information about current and future business conditions to company decision makers, analysts, and investors.
 It is calculated separately for the manufacturing and services sectors and then a composite index is also constructed.
 The PMI is a number from 0 to 100. A score above 50 means expansion, while a score below that denotes contraction.
 A reading at 50 indicates no change.

Key Findings:
 Sector-wise performance - Overall business confidence levels about growth prospects continued to improve after hitting an eight-month low in March
 Overall improvement in the health of the sector was the strongest since October 2020.
 Demand-driven inflation is positive thus create challenges for the economy and open the door for more interest rate hikes.