- India’s manufacturing sector activity improved for the third straight month in October with IHS Markit India Manufacturing Purchasing Managers’ Index (PMI) saw a rise from 56.8 in September to 58.9 in October, 2020.
- The IHS Markit India Manufacturing Purchasing Managers’ Index is an indicator of business activities- both in manufacturing and the service sectors.
- It is derived from a survey of 500 manufacturing companies.
- The PMI is usually released at the start of every month.
- It is considered a good leading indicator of economic activity.
- It is based on five individual indexes with the following weights:
New Orders (30 percent),
Output (25 percent),
Employment (20 percent),
Suppliers’ Delivery Times (15 percent)
Stock of Items Purchased (10 percent)
- A reading above 50 indicates an expansion of the manufacturing sector compared to the previous month, below 50 represents a contraction, while 50 indicates no change.