When reading economic news or investment reports, you often come across the term PMI. This index is a key tool for understanding economic trends. Let’s explore what PMI means and how to use related English phrases.
What is PMI?
PMI (Purchasing Managers’ Index) is a survey-based economic indicator. It measures the business conditions of manufacturing and service industries through questionnaires answered by purchasing managers.
- Above 50 → Expansion in economic activity
- Below 50 → Contraction in economic activity
Useful Phrase
- “PMI is an important leading indicator of economic health.”
Why is PMI important?
Purchasing managers are at the frontline of business operations, so they notice changes in demand and supply earlier than most. That’s why PMI is considered a leading indicator and often influences stock markets and currency exchange rates.
Useful Phrase
- “Investors watch PMI data closely to predict market trends.”
Types of PMI
There are two main types of PMI: Manufacturing PMI and Services PMI.
- Manufacturing PMI → Reflects production, orders, and inventory in factories
- Services PMI → Shows activity in sectors like retail, finance, and tourism
Useful Phrases
- “The manufacturing PMI shows the health of the factory sector.”
- “The services PMI reflects demand in the service industry.”
Conclusion
PMI is a valuable index that provides early signals of economic shifts. By learning it along with useful English phrases, you can better understand global economic news and improve your English skills at the same time.
Key Phrases to Remember
- PMI is an important leading indicator of economic health.
- Investors watch PMI data closely to predict market trends.
- The manufacturing PMI shows the health of the factory sector.
- The services PMI reflects demand in the service industry.
