PMI (purchasing managers’ index) definition

The Purchasing Managers’ Index (PMI) is a key economic indicator that shows how businesses are doing.

Home Investing glossary PMI (purchasing managers’ index)

What is the purchasing managers’ index?

The purchasing managers’ index (PMI) is a key economic indicator that shows how businesses are doing. It’s based on surveys of company managers, who report on things like new orders, production levels, and hiring.

 

How is the PMI scored?

The PMI is scored on a scale from 0 to 100:

  • Above 50: the sector is expanding.
  • Below 50: the sector is contracting.

There are different types of PMI, including manufacturing PMI (for factories) and services PMI (for businesses like banks and restaurants). Investors and economists watch PMI closely because it gives an early signal of how the economy is performing.

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