Mint Explainer: Why is PMI data important?
India’s manufacturing purchasing managers index (PMI) rose to a three-month high in August, following an increase in orders and output. However, India’s services-sector growth slowed down in August after hitting a 13-year high in July. Mint explains the significance of PMI data.
PMI data is an indicator of the health of the economy. The S&P Global India PMI data sets, for both manufacturing and services, are compiled from responses to questionnaires sent to about 400 manufacturing and service-sector companies. A PMI figure above 50 signifies expansion, while below 50 signifies contraction.
India's services PMI has held firm in the expansion zone every month since August 2021, its longest such stretch since August 2011. India's manufacturing sector has also expanded every month in the past two years. The PMI for manufacturing rose to 58.6 in August from 57.7 in July, 57.8 in June and 58.7 in May.
The services PMI fell to 60.1 in August from 62.3 in July, 58.5 in June and 61.2 in May. The composite PMI, comprising both the manufacturing and services indices, fell to 60.9 in August from 61.9 in July. The manufacturing PMI painted a vibrant picture of the country’s manufacturing landscape in August.
Robust and accelerated increases in new orders and production suggest that the sector looks set to have a strong contribution to economic growth in the second quarter of FY24. Meanwhile, services companies achieved a remarkable milestone in August as they witnessed a record surge in new export business. However, their growth slowed down from July.
. Read more on livemint.com
