Why in News? 

India's Purchasing Managers' Index (PMI) has increased for the first time in three quarters. 

About  

• PMI is a key indicator of business activity in both the manufacturing and services sectors. 
• It is a survey-based measure that gauges changes in respondents' perceptions of key business variables compared to the previous month. 
• Separate PMIs are calculated for the manufacturing and services sectors, which are then combined to create a composite index. 
• The index helps assess whether market conditions are expanding, contracting, or remaining stable, based on the views of purchasing managers. 
• There are two types of PMI: Manufacturing PMI and Services PMI. 

How is the Manufacturing PMI Calculated? 

• It is based on responses from a wide range of companies in the manufacturing sector. 
• The survey focuses on five key variables: new orders, output, employment, suppliers' delivery times, and stock of items purchased. 
• Conducted monthly, the PMI reflects current market trends. 
• A PMI reading above 50 signals expansion, while a reading below 50 indicates contraction. The extent of change is determined by how far the number deviates from 50 and compared to the previous month’s data. 
• In India, S&P Global publishes the PMI data, leveraging its expertise in financial information and analytics.