What is the PMI?

What is the PMI Purchasing Managers' Index, let's find out.

1. The Purchasing Managers' Index (PMI) is a composite index, which is weighted by five diffusion indexes, namely the new orders index (referred to as orders), the production index (referred to as production), the employment index (referred to as employees), the first-class business delivery time index (referred to as distribution), and the main raw material inventory index (referred to as inventory).

2. China's manufacturing purchasing managers' index.

The PMI index is calculated as follows: PMI = 30% of orders + 25% of production + 20% of employees + 15% of delivery + 10% of inventory

The PMI is expressed as a percentage, often using 50% as the dividing point for the strength of the economy: when the index is above 50%, it is interpreted as a signal of economic expansion. When the index is below 50%, especially very close to 40%, there are fears of an economic depression.

It is a very important subordinate pointer in leading indicators. In addition to the focus on the overall index, the price index paid and the price index collected in the PMI are also considered as a type of price indicator, and the employment index is more commonly used to ** the unemployment rate and the performance of the non-farm payrolls.

3. The Purchasing Managers' Index has become an important evaluation index of the world's economic operation activities and a barometer of changes in the world economy, and the establishment of the China Purchasing Managers' Index (CFLP-PMI) has a positive role in promoting the improvement of China's economy and even the world economic monitoring system. It has a good application value in the formulation of national economic policies, business operations, and financial investment activities. It can be used to analyze economic trends, help make various investment decisions, conduct periodic research, etc., and has become one of the important information widely used in banks, enterprises, various financial institutions and finance.

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Problem description: What is the Purchasing Managers' Index?

Analysis: The Purchasing Managers' Index (PMI) is an internationally accepted macroeconomic monitoring index system, which plays an important role in the monitoring and evaluation of national economic activities. At present, 22 countries and regions, including the United States, the United Kingdom, Japan, and Singapore, have formulated PMI indexes.

China's Purchasing Managers' Index is jointly completed by the National Bureau of Statistics and the China Federation of Logistics and Purchasing, which is a leading indicator that reflects market dynamics in a rapid and timely manner. At present, the Purchasing Managers' Index Survey is included in the official survey system of the National Bureau of Statistics. Starting from June this year, the manufacturing purchasing managers' index will be released on a monthly basis, and according to the international practice, special industry authorities will conduct macro analysis in combination with PMI survey data, so that the results of the analysis are more forward-looking and authoritative.

China's manufacturing purchasing managers' index system includes a total of 11 indexes: new orders, production, employment, business distribution, inventory, new export orders, procurement, finished goods inventory, purchases, imports, and backlog orders. The Manufacturing Purchasing Managers' Index (PMI) is a composite index that is calculated globally.

For example, the PMI index of the manufacturing industry is above 50%, reflecting the overall expansion of the manufacturing economy; Below 50%, it usually reflects an overall recession in the manufacturing economy.

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Purchasing Managers'Index, or PMI for short, is a measure of the health of the economy that is surveyed and compiled by the Procurement Management industry organization. The index reflects changes in procurement-sensitive activity in manufacturing, services and other sectors, and is one of the important indicators for assessing the growth of economic activity in a country or region. <>

Specifically, the PMI includes data on the following five aspects: new orders, production, employment, delivery time and inventory. A comprehensive analysis of the data in these five areas yields a higher value indicating more active economic activity, and vice versa.

In general, a PMI above 50 indicates that the economy is in an expansionary state, while a PMI below 50 indicates that the economy is contracting. However, it should be noted that the PMI is only an indicator of the health of the economy, and cannot be used as a basis for judging the state of the economy alone, and needs to be considered in conjunction with other macroeconomic indicators.

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Purchasing Managers'Index (PMI) is an economic indicator that is derived from procurement surveys. The index measures the level of economic activity in the manufacturing and non-banking sectors, reflecting the general health of the economy. PMI usually includes 5 aspects of the index:

New orders, production, employment, delivery times and inventories. These indices are all numbers between 0 and 100, with 50 indicating that the economy is in a state of expansion and below 50 indicating that the economy is in a state of contraction. Generally, when the PMI is above 50, it indicates that the economy is growing; When the PMI is below 50, it indicates that the economy is contracting.

The PMI is one of the most widely used economic indicators around the world, and is followed by many countries and regions**, financial institutions, enterprises and investors.