Purchasing Manager Index (PMI)

The Purchasing Manager Index (PMI) is an indicator of the economic health of the manufacturing sector. The index is based on five major indicators: new orders, inventory levels, production, supplier deliveries and the employment environment.

A PMI of more than 50, compared to the previous month, represents an expansion of the manufacturing sector. A reading under 50 represents a contraction. While a reading at 50 indicates no change. The Institute of Supply Management (ISM) now uses only the acronym, PMI. Although the ISM publishes several indexes, the PMI is the most widely followed and is sometimes referred to as the ISM index.