A purchasing managers index (PMI) is an economic indicator based on government reports undertaken by industrial companies. The index surveys product managers, who are in charge of purchasing the materials needed to create a firm's products. PMIs are used by investors to get a sense of what purchasing managers think of their sector's future. A PMI can affect market sentiment and act as the basis for trading decisions.

It is an economic indicator that is determined from month to month studies of purchasing managers and supply leaders from explicit organizations. PMI manufacturing gives a sign of the economic strength of the manufacturing area.

The Purchasing Managers’ Index (PMI) is an economic indicator that measures the health of the manufacturing and services sectors. It is based on monthly surveys of private companies, assessing factors like new orders, production, employment, supplier deliveries, and inventories. A PMI above 50 indicates expansion, while a figure below 50 signals contraction.

PMI is a leading indicator, helping investors, policymakers, and businesses anticipate economic trends. Two key versions are:

Manufacturing PMI: Tracks factory activity.

Services PMI: Measures non-manufacturing business conditions.

Published by organisations like Markit and ISM, PMI data influences forex, stock markets, and monetary policy decisions. Traders watch PMI releases closely, as strong readings may boost a currency, while weak data can trigger sell-offs.