Purchasing Managers' Index - PMI

AAA

DEFINITION of 'Purchasing Managers' Index - PMI'

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

INVESTOPEDIA EXPLAINS 'Purchasing Managers' Index - PMI'

A PMI of more than 50 represents expansion of the manufacturing sector, compared to the previous month. A reading under 50 represents a contraction, while a reading at 50 indicates no change. Prior to September 1, 2001, the acronym (PMI) stood for Purchasing Managers' Index. 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.

VIDEO

Loading the player...
RELATED TERMS
  1. NY Empire State Index

    A seasonally adjusted index that tracks the results of the Empire ...
  2. Institute For Supply Management ...

    A non-profit organization that serves professionals, who are ...
  3. Flash Services PMI

    An early estimate of the Services Purchasing Managers' Index ...
  4. Flash Manufacturing PMI

    An estimate of the Manufacturing Purchasing Managers' Index (PMI) ...
  5. Inventory

    The raw materials, work-in-process goods and completely finished ...
  6. Supply Chain Management - SCM

    Supply chain management is the streamlining of a business' supply-side ...
RELATED FAQS
  1. How can I use a regression to see the correlation between prices and interest rates?

    In statistics, regression analysis is a widely used technique to uncover relationships among variables and determine whether ... Read Full Answer >>
  2. How might a company use demographics to assess the size of a potential market?

    Demographics can be used to help a company determine key characteristics of the potential population to which it company ... Read Full Answer >>
  3. How do I calculate a modified duration using Matlab?

    The modified duration gauges the sensitivity of the fixed income securities to changes in interest rates. To calculate the ... Read Full Answer >>
  4. How do I calculate the rule of 72 using Matlab?

    In finance, the rule of 72 is a useful shortcut to assess how long it takes an investment to double given its annual growth ... Read Full Answer >>
  5. How do I calculate the standard error using Matlab?

    In statistics, the standard error is the standard deviation of the sampling statistical measure, usually the sample mean. ... Read Full Answer >>
  6. How do I adjust the rule of 72 for higher accuracy?

    The rule of 72 refers to a time value of money formula that investors use to calculate how quickly an investment will double ... Read Full Answer >>
Related Articles
  1. Economics

    What is the Purchasing Managers' Index?

    The Purchasing Managers’ Index, or PMI as it is commonly called, is an indicator of the economic health of the manufacturing sector.
  2. Insurance

    Working Capital Works

    A company's efficiency, financial strength and cash-flow health show in its management of working capital.
  3. Economics

    Understanding Management by Objectives

    Management by objectives is a process in which a manager and an employee agree on specific performance goals and then develop a plan to reach those goals.
  4. Professionals

    Will Consumer Spending Save 2015?

    Consumer spending is considered an important number (and it is), but a savvy investor will always look at "why" rather than just "what." You should too.
  5. Stock Analysis

    Where Will the Shanghai Composite Be in a Year?

    The Shanghai Composite Index is on fire. But where will it be a year from now?
  6. Economics

    What Does Going Concern Mean?

    Going concern is a concept used in business and accounting to describe the fiscal health of a company.
  7. Fundamental Analysis

    Calculating the Capacity Utilization Rate

    Capacity utilization rate is a ratio used to compare a current usage level against a maximum potential level.
  8. Economics

    Can Fracking Survive at $60 a Barrel?

    Can fracking survive at $60 a barrell?
  9. Investing

    Where Are Real Estate Stocks Heading?

    We summarize five economic reports that investors should monitor monthly to keep them informed of where real estate and its related stocks are heading.
  10. Economics

    How Military Spending Affects The Economy

    Military spending is a one area where there is no private solution to replace the public purse, but it does end up impacting the economy.

You May Also Like

Hot Definitions
  1. Investopedia

    One of the best-known sources of financial information on the internet. Investopedia is a resource for investors, consumers ...
  2. Unfair Claims Practice

    The improper avoidance of a claim by an insurer or an attempt to reduce the size of the claim. By engaging in unfair claims ...
  3. Killer Bees

    An individual or firm that helps a company fend off a takeover attempt. A killer bee uses defensive strategies to keep an ...
  4. Sin Tax

    A state-sponsored tax that is added to products or services that are seen as vices, such as alcohol, tobacco and gambling. ...
  5. Grandfathered Activities

    Nonbank activities, some of which would normally not be permissible for bank holding companies and foreign banks in the United ...
  6. Touchline

    The highest price that a buyer of a particular security is willing to pay and the lowest price at which a seller is willing ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!