PMI (Purchasing Managers Index)

PMI is a survey-based indicator that asks purchasing managers at hundreds of companies whether business conditions are improving, staying the same, or getting worse. The result is a single number where 50 is the dividing line between expansion and contraction. Above 50 = the sector is growing. Below 50 = the sector is shrinking. There are two main PMIs: Manufacturing PMI (factories, production, shipping) and Services PMI (banking, hospitality, retail). In modern economies, services dominate — services PMI is now more important than manufacturing PMI for most major currencies. PMIs are leading indicators. They're released BEFORE the hard data (GDP, retail sales, employment) and they often signal turning points 2-3 months ahead. A PMI dropping from 55 to 49 is a strong recession warning even if GDP is still growing.