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Purchasing Managers' Index (PMI)

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July 10, 2025

Prelims : Current Events of National and International Importance

Why in News?

According to the Purchasing Managers' Index (PMI), Indian services sector growth touched a 10-month high in June 2025 on a sharp upturn in new business.

Purchasing Managers' Index (PMI)

  • Released by – S&P Global (usually released every month).
  • Key Indicators - New orders, production, employment, supplier deliveries, and inventory levels.
  • Each of them was weighted and combined into a single index number.
  • Significance - Helps businesses, investors, and policymakers gauge economic conditions, future demand as an economic indicator.
  • Provides early signals of forward trends in a broader economy.
  • Key sectors like manufacturing, services, and construction will be compared and analysed by global economies.
  • Findings - The HSBC India Services Index indicating a sharp increase in the services sector.
  • A PMI score above 50 signifies growth, and June’s figure marked a ten-month high in sector expansion.
  • Surge in New Business Orders - Significant rise in domestic orders and a moderate increase in export orders.
  • Growth in exports came primarily from markets in Asia, the Middle East, and the U.S..
  • Increase in Job Growth - Employment rose for consecutive months, with job creation continuing above its long-run average, though slowing slightly from May’s record levels.
  • Margin Improvements - Input costs rose at a slower pace compared to the output charges, leading to improved margins.
  • Consumer services saw the highest cost pressures, while the finance and insurance sectors noted the fastest increase in output charges.
  • Outlook and Confidence - 18% of service providers remain optimistic about future growth in the next year, though this was the lowest level of confidence since mid-2022.
  • Overall, service sector confidence dipped below the long-run average.
  • Composite PMI Index - The index combines manufacturing and services data, showing a slowdown in both price increases and cost burdens.

Reference

The Hindu | Purchasing Managers' Index (PMI)

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