What does PMI index mean?

The PMI index, or Purchasing Managers' Index, is a closely watched economic indicator in the field of finance. It provides insight into the health and direction of a country's manufacturing sector. The index is based on a monthly survey of purchasing managers from a range of industries, and it measures factors such as new orders, production levels, employment, supplier deliveries, and inventories. A PMI index reading above 50 indicates that the manufacturing sector is expanding, while a reading below 50 indicates contraction. The PMI index is considered a leading indicator of economic health, as it provides early signals of changes in business conditions. It is closely monitored by investors, analysts, and policymakers for its potential impact on financial markets and monetary policy decisions.