#PMI
The Economic Indicator PMI is an abbreviation for Purchasing Managers' Index.
It is an index used to measure economic activity in a specific sector, such as manufacturing or services.
What does PMI measure?
PMI measures the opinions of purchasing managers in companies regarding 5 key elements:
1. New orders
2. Production
3. Employment
4. Supplier delivery times
5. Inventory
How is PMI interpreted?
If the index value is above 50 → it means that economic activity is expanding.
If the value is below 50 → it means that economic activity is contracting.
If the value is exactly 50 → no expansion or contraction (stability).
Why is it important?
Because it provides an early indication of the state of the economy, even before official data such as Gross Domestic Product (GDP) is released. Therefore, it is closely monitored by investors and financial and economic decision-makers.
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