Why in the news ?
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Factory production improved a tad as September’s Purchasing Manager Index (PMI) rose to 52.2 per cent from 1.7 per cent of August.
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This is the 14th consecutive month of expansion.
More in the news
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The index, better known as the Nikkei India PMI Index, is based on the survey conducted among purchasing executives in over 400 companies.
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These companies are divided into eight broad categories:
1. Basic Metals,
2. Chemicals & Plastics,
3. Electrical & Optical,
4. Food & Drink,
5. Textiles & Clothing,
6. Timber & Paper
7. Mechanical Engineering and
8. Transport.
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The report noted improvement in growth during September amid firmer gains in new orders, output and employment.
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Sales rose from both domestic and foreign clients, while manufacturers raised their buying activity and bolstered stocks of purchases in anticipation of further growth.
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On the price front, input costs rose at a stronger rate amid reports of higher prices for fuel and steel.
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Charges were subsequently increased at a slightly firmer pace.
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Manufacturers remain confident that output will increase over the coming year.
PMI
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PMI or a Purchasing Managers’ Index (PMI) is an indicator of business activity – both in the manufacturing and services sectors.
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It is a survey-based measures that asks the respondents about changes in their perception of some key business variables from the month before.
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It is calculated separately for the manufacturing and services sectors and then a composite index is constructed.
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A figure above 50 denotes expansion in business activity. Anything below 50 denotes contraction. Higher the difference from this mid-point greater the expansion or contraction.
Source
The Hindu, Economic Times.