Purchasing Managers' Index (PMI)

PMI surveys ask purchasing managers whether key measures, such as new orders, output, employment, supplier delivery times and inventories, have increased, decreased or stayed the same compared with the previous month. The answers are combined into an index.

A reading above 50 indicates that activity is expanding compared with the previous month, while a reading below 50 indicates it is contracting. For example, a manufacturing PMI of 53 suggests factory activity is growing, while a reading of 47 suggests it is shrinking.

PMIs are widely followed because they are released early each month, before most official data, and are seen as leading indicators of economic trends. They are published for many countries and regions, often separately for manufacturing and services.

Because PMIs measure the breadth of change rather than its size, they show the direction of activity more reliably than its exact pace. They are based on surveys, so they can also be affected by sentiment.