Understanding the Purchasing Managers' Index
A 1-minute lesson from the MarketPro academy, one of 24 in fundamental analysis.
The Purchasing Managers' Index (PMI) is a survey-based indicator that gauges the state of manufacturing or services activity by asking purchasing managers whether conditions are improving, worsening, or unchanged. PMI is built around a threshold of 50: a reading above 50 signals expansion in that sector, while a reading below 50 signals contraction.
The Purchasing Managers' Index (PMI) is a survey-based indicator that gauges the state of manufacturing or services activity by asking purchasing managers whether conditions are improving, worsening, or unchanged.
PMI is built around a threshold of 50: a reading above 50 signals expansion in that sector, while a reading below 50 signals contraction. Because it is based on current business conditions reported directly by managers, PMI is often released faster than official government data, making it a widely watched early signal of economic momentum.
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