Purchasing Managers Index
a.k.a. PMI
A monthly survey of business buyers that shows whether manufacturing or services activity is expanding or shrinking.
A Purchasing Managers Index (PMI) asks the people who order supplies for companies a simple set of questions: are new orders, output, hiring and deliveries better or worse than last month? The answers are boiled into one number where 50 is the dividing line. Above 50: the sector is growing. Below 50: it is shrinking.
PMIs come out early in the month for most big economies, often with separate manufacturing and services readings, so they are one of the fastest reads on how an economy is doing. A sharp drop below 50 can knock a currency long before official GDP data confirms the slowdown.
Reading a PMI
- Last month's eurozone manufacturing PMI: 48.5.
- This month's: 50.4.
- Forecast was 49.0.
Bottom line: The sector flipped from shrinking to growing and beat expectations. That surprise is what moves the euro, not the number alone.
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