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Manufacturing PMI rises to 52.2 in Sept.
Why in the news ?
- 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.
- This is the 14th consecutive month of expansion.
More in the news
- The index, better known as the Nikkei India PMI Index, is based on the survey conducted among purchasing executives in over 400 companies.
- 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.
- The report noted improvement in growth during September amid firmer gains in new orders, output and employment.
- Sales rose from both domestic and foreign clients, while manufacturers raised their buying activity and bolstered stocks of purchases in anticipation of further growth.
- On the price front, input costs rose at a stronger rate amid reports of higher prices for fuel and steel.
- Charges were subsequently increased at a slightly firmer pace.
- Manufacturers remain confident that output will increase over the coming year.
PMI
- PMI or a Purchasing Managers' Index (PMI) is an indicator of business activity - both in the manufacturing and services sectors.
- It is a survey-based measures that asks the respondents about changes in their perception of some key business variables from the month before.
- It is calculated separately for the manufacturing and services sectors and then a composite index is constructed.
- 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.