PURCHASING MANAGERS  INDEX

News: Purchasing managers index for India was  55.5 in April while in march it was 55.4. 

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Findings of the index:

• Manufacturing activity in the month of April was almost flat. 

• However, the input cost rose pushing the prices of the commodity.

• April witnessed the steepest increase in input costs in the last seven years which inturn is responsible for sharpest upturn in output charges since October 2013. 

• Intensification of the COVID-19 crises has led to the slowest rate of increase in output and sales.

• Exports from India increased for the eighth consecutive month in April and at the fastest rate since October 2020, due to an increase in International  demand for Indian goods.

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PMI:

• US-based Institute of Supply Management started releasing PMI in 1948.

• PMI or a Purchasing Managers’ Index (PMI) is an indicator of business activity in the manufacturing as well as services sector.

• It is a survey-based, perception based index. It asks the respondents about changes in their perception of some key business variables from the month before. 

• Firstly, separate indices for manufacturing and services sectors are calculated and then a composite index is constructed. 

• IHS Markit India released the Purchasing managers index.

• It is a seasonally adjusted index.

• If the outcome points are above 50, it means expansion in business activity and less than 50 denotes contraction.

• An economy is believed to be expanding if the PMI for a month is higher than a previous month’s index. 

• It is released at the beginning of every month for the previous month.