S&P Global India Manufacturing Purchasing Managers Index (PMI)

Markit Manufacturing PMI is an indicator of changes in business conditions in Indian manufacturing sector in the specified month. The indicator is based on monthly surveys of purchasing managers working in about 400 private companies of the manufacturing sector. The responses are evaluated in comparison with the previous month.

Purchasing managers can sometimes track changes in market conditions earlier than other company employees, since purchases precede a company's production activity. Thus, they are among the first to see when conditions change for better or for worse. The sample for the survey is chosen so as to cover the maximum possible number of large companies across the country.

Purchasing managers complete a questionnaire, in which they evaluate the basic parameters of their company work, such as production, the number of new orders, inventories, etc. Survey participants provide relative estimates, that is, if the data is up, or if the data is down or if the data remains the same. Individual subindices are calculated based on these answers. These subindices characterize inflation, employment and other key indicators of economic activity.

The index is seasonally adjusted. Individual weights are given to polled companies. Readings above 50 indicate that most of respondents positively characterize current business conditions. Readings below 50 mean worsening of business conditions.

Manufacturing PMI is one of the most popular indexes closely watched by economists. It provides operational information covering the entire sector. It is interpreted as a leading indicator of business activity and inflation. The PMI growth is an indication of favorable market conditions and can be seen as positive for Indian rupee quotes.