Purchasing Managers Index

Purchasing Managers Index

Purchasing Managers' Indexes (PMI) are economic indicators derived from monthly surveys of private sector companies. The two principal producers of PMIs are Markit Group, which conducts PMIs for over 30 countries worldwide, and the Institute for Supply Management (ISM), which conducts PMIs for the US.

Markit Group and the Institute for Supply Management separately compile The Purchasing Managers' Index (PMI) surveys on a monthly basis by polling businesses that represent the make up of the respective sector. The surveys cover private sector companies, but not the public sector.

The current Purchasing Managers' Index (PMI) survey can be found under "ISM Reports On Business" on the ISM home page, or directly on this page. The surveys are released shortly after the end of the reference period. The actual release dates depend on the sector covered by the survey. Manufacturing data are generally released on the 1st working day of the month, followed by construction on the 2nd working day and services on the 3rd working day.

The Institute for Supply Management in Tempe, Arizona.(ISM) began to produce the report for the US in 1948.The data for the index are collected through a survey of 400 purchasing managers in the manufacturing sector on five different fields, namely, production level, new orders from customers, speed of supplier deliveries, inventories and employment level. Respondents can report either better, same or worse conditions than previous months. For all these fields the percentage of respondents that reported better conditions than the previous months is calculated. The five percentages are multiplied by a weighing factor (the factors adding to 1) and are added.

The Chicago-PMI survey registers manufacturing and non-manufacturing activity in the Chicago region. Investors care about this indicator because the Chicago region somewhat mirrors the nation in its distribution of manufacturing and non-manufacturing activity.

The predominant operator and owner of the Purchasing Managers Index (PMI) series outside the US is the Markit Group

The Markit and ISM Purchasing Managers Indices include additional sub indices for manufacturing surveys such as new orders, employment, exports, stocks of raw materials and finished goods, prices of inputs and finished goods.

Other similar purchasing managers indices are operated by the IFO in Germany, The Bank of Japan in Japan (tankan), the China PMI operated by the Chinese Government, and the Swedish PMI run by private bank Swedbank.