What is PMI?

• Purchasing Managers’ Index is an economic indicator which indicates the business activity & economic health of both the manufacturing and service sectors.
• PMI of India is published by Japanese firm Nikkei but compiled and constructed by IHS Markit, a London–based global information provider.
• PMI is an investor sentiment tracking index and is more dynamic in nature. They are derived from monthly surveys of about 400 private companies.
• Variables used for calculating the PMI are: Output, New Orders, Employment, Input Costs, Output Prices, Backlogs of Work, Export Orders, Quantity of Purchases, Suppliers’ Delivery Times, Stocks of Purchases and Stocks of Finished Goods.
• PMI, which is usually released at the start of the month, serves as a leading indicator of economic activity. It comes before the official data on industrial output, core sector manufacturing and GDP growth. 

How to read PMI?

• While PMI >50 implies an expansion of business and economic activity, PMI <50 means contraction.

Why in News?

• In November, India’s manufacturing sector recorded the best uptick in output and new orders since August and falling input costs lifted sentiment to an eight-year high.
•  India Manufacturing Purchasing Managers’ Index (PMI) which moved up from 55.3 in October to 55.7 last month.     
• A PMI reading of 50 indicates no change in economic activity from the previous month, while a reading above 50 reflects an expansion.  

reference:

https://www.thehindu.com/business/Economy/manufacturing-output-orders-rebound-in-november-sp-global-pmi/article66208739.ece