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

Markit Service PMI is an indicator of changes in business conditions in India's service sector in the specified month. The indicator is based on monthly surveys of purchasing managers working in around 400 private companies of Indian service sector. The sample includes companies providing consumer, transportation, informational, financial, communication, insurance and real estate services.

Often, purchasing managers can track changes in market conditions prior to other company employees, because purchases precede company's service production activities. 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 business activity, new orders, pending orders, input and output prices, employment and production.

Respondents are asked to provide a relative estimate, showing whether the above parameters have improved, deteriorated or have not changed. 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.

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