{"id":220960,"date":"2025-03-28T10:45:00","date_gmt":"2025-03-28T14:45:00","guid":{"rendered":"https:\/\/ibkrcampus.com\/campus\/?p=220960"},"modified":"2025-06-20T15:36:12","modified_gmt":"2025-06-20T19:36:12","slug":"purchasing-managers-index-what-is-a-pmi","status":"publish","type":"post","link":"https:\/\/www.interactivebrokers.com\/campus\/traders-insight\/securities\/macro\/purchasing-managers-index-what-is-a-pmi\/","title":{"rendered":"Purchasing Managers\u2019 Index: What is a PMI?"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\" id=\"h-key-takeaways\">Key takeaways<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-what-is-a-pmi\">What is a PMI?<\/h3>\n\n\n\n<p>A Purchasing Managers\u2019 Index looks at economic trends in the manufacturing and service sectors.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-which-pmis-draw-attention\">Which PMIs draw attention?<\/h3>\n\n\n\n<p>S&amp;P Global and the Institute of Supply Management are the two major PMI producers that US investors may know.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"h-how-do-pmis-differ\">How do PMIs differ?<\/h3>\n\n\n\n<p>Each PMI seeks to represent manufacturing or services companies, which differ in fundamental ways.<\/p>\n\n\n\n<p>How is the economy doing? Investors all over the world ask this same question. But one single answer can&#8217;t give a complete picture. Gross domestic product, inflation, employment, and wage growth are all backward-looking indicators. A Purchasing Managers\u2019 Index (PMI), however, looks forward at the economic trends to expect.<\/p>\n\n\n\n<p><a href=\"https:\/\/www.invesco.com\/us\/en\/insights\/what-is-inflation-fed-measure.html\"><strong>Learn more about inflation and how it works<\/strong><\/a><\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-is-a-purchasing-managers-index\"><strong>What is a Purchasing Managers\u2019 Index?<\/strong><\/h2>\n\n\n\n<p>A Purchasing Managers\u2019 Index (PMI) looks at economic trends in the manufacturing and service sectors to understand their health. Business executives in each of these sectors are surveyed monthly about key areas such as employment, output, prices charged, and the level of new orders.<\/p>\n\n\n\n<p>Combined into a single number, this information can help indicate the direction of the broader economy and can help influence decisions by companies, central bankers, and investors. A PMI is measured from 0 to 100, with 50 showing no change compared to the prior month, and above or below 50 showing positive or negative change, respectively.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-what-s-the-difference-between-the-manufacturing-pmi-and-services-pmi\"><strong><a><\/a>What\u2019s the difference between the Manufacturing PMI and Services PMI?<\/strong><\/h2>\n\n\n\n<p>A Manufacturing PMI represents companies that produce goods in industries like automotive, clothing, and technology. A Services PMI gauges activity level in industries with a less tangible product, such as financial services, health care, and hospitality.<\/p>\n\n\n\n<p>Because these sectors differ in fundamental ways, the business aspects each PMI seeks to represent differ somewhat as well. Both measure common metrics including new orders, employment, and prices paid, while some data points may be unique, such as customer inventories for manufacturing companies.<\/p>\n\n\n\n<p>There is also a Composite PMI, which combines Manufacturing and Services into a single number for a holistic view.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-who-produces-purchasing-managers-indexes\"><strong>Who produces Purchasing Managers\u2019 Indexes?<\/strong><\/h2>\n\n\n\n<p>There are two major producers of PMIs that US investors may be familiar with: S&amp;P Global and the Institute of Supply Management (ISM). S&amp;P Global produces PMIs for more than 40 countries, and the ISM focuses on PMIs for the US.<\/p>\n\n\n\n<p>There are certain differences among the PMIs produced by ISM and S&amp;P Global. For example, ISM takes a broader view of the services sector, including anything that\u2019s not manufacturing as a service industry. Therefore, the ISM Services PMI includes some industries that S&amp;P Global Services does not, such as mining, utilities, agriculture, forestry, fishing, and hunting.<\/p>\n\n\n\n<p>Other organizations produce Purchasing Managers\u2019 Indexes as well, such as China\u2019s National Bureau of Statistics, which produces the China PMI.&nbsp;<\/p>\n\n\n\n<p>&#8212;<\/p>\n\n\n\n<p>Originally Posted March 27, 2025<\/p>\n\n\n\n<p><a href=\"https:\/\/www.invesco.com\/us\/en\/insights\/what-is-purchasing-managers-index-pmi.html?utm_campaign=thirdparty&amp;utm_source=ibrokers&amp;utm_medium=referralference\">Purchasing Managers\u2019 Index: What is a PMI?<\/a> By Invesco US <\/p>\n\n\n\n<p><strong>Important information<\/strong><\/p>\n\n\n\n<p>NA4350795<\/p>\n\n\n\n<p>Image: Suriyapong Thongsawang \/ Getty&nbsp;<\/p>\n\n\n\n<p>Gross domestic product is a broad indicator of a region\u2019s economic activity, measuring the monetary value of all the finished goods and services produced in that region over a specified period of time.<\/p>\n\n\n\n<p>The opinions referenced above are those of the author as of March 27, 2025. These comments should not be construed as recommendations, but as an illustration of broader themes. Forward-looking statements are not guarantees of future results. They involve risks, uncertainties and assumptions; there can be no assurance that actual results will not differ materially from expectations.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A Purchasing Managers\u2019 Index looks at economic trends in the manufacturing and service sectors.<\/p>\n","protected":false},"author":186,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18,6,8,9,26,3],"tags":[5391,20030,2264,20029,20031],"contributors-categories":[13606],"class_list":{"0":"post-220960","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-macro","7":"category-north-america","8":"category-region","9":"category-securities","10":"category-text-articles","11":"category-traders-insight","12":"tag-business-sentiment","13":"tag-economic-indicator","14":"tag-manufacturing-index","15":"tag-pmi-explained","16":"tag-supply-chain-signal","17":"contributors-categories-invesco-us"},"pp_statuses_selecting_workflow":false,"pp_workflow_action":"current","pp_status_selection":"publish","acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.9 (Yoast SEO v27.4) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>Purchasing Managers\u2019 Index: What is a PMI?<\/title>\n<meta name=\"description\" content=\"A Purchasing Managers\u2019 Index looks at economic trends in the manufacturing and service sectors.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.interactivebrokers.com\/campus\/wp-json\/wp\/v2\/posts\/220960\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Purchasing Managers\u2019 Index: What is a PMI? 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