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Purchasing Managers Index [PPP]

The Purchasing Manager Index (PMI) assesses the business conditions of the manufacturing and service sectors of a country. The PMI is used to measure the change in the spending of business firms.

About 500 purchasing managers are asked to grade the relative level of business conditions regarding employment, level of inventory and new orders, state of production, and supplier deliveries.

A reading above 50 indicates growth in the sector. Conversely, a reading below 50 points to a contraction.

Importance:
The indices (manufacturing and service) may be used as leading indicators of the economy

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