Manufacturing Purchasing Managers’ Index (PMI)

Why in News?

• India’s Manufacturing PMI rose to 59.3 in August 2025 (from 59.1 in July).
• Marks the fastest improvement in operating conditions in 17.5 years.
• Driven mainly by higher production volumes & better supply-demand alignment.

About PMI (Purchasing Managers’ Index)

• Economic indicator based on monthly surveys of companies.
• Measures business activity trends in manufacturing & services.
• Calculated by: S&P Global (earlier IHS Markit); published in India by HSBC India Manufacturing PMI.
• Interpretation:
  • >50 → Expansion in business activity.
  • <50 → Contraction in business activity.
  • Rate of expansion is judged by difference from 50 and previous month’s figure.
• Survey method: Fact-based questions to a panel of company purchasing managers.

Significance of PMI

• Leading indicator of economic activity (comes earlier than official GDP/IIP data).
• Used by investors, policymakers, central banks to assess economic momentum.
• PMI reflects output, new orders, employment, supplier delivery times, inventories.