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Purchasing Managers' Index Definition

Dictionary of Financial Terms

Official name: ISM Index: Manufacturing

What exactly? A national manufacturing index based on a survey of purchasing executives at roughly 300 industrial companies. Signals expansion when the PMI is above 50 and contraction when below.

Source: Institute for Supply Management

Frequency: Monthly

Released when? First business day of the month at 10 a.m. Eastern. Data for prior month.

Market importance: High. Nearly always moves markets. Extremely timely -- and this is the king of all manufacturing indices. Considered the single best snapshot of the condition of the factory sector.

Other notes:The ISM Index calculates nine different sub-indices. These include new orders, production, employment, supplier deliveries, inventories, prices, new export orders, imports and backlog of orders. The production index is used to help predict industrial production. The prices index is used to help predict the Producer Price Index. The new orders index is used to help predict factory orders. The employment index is used to help predict manufacturing employment. And the supplier deliveries index is a component of the leading economic indicators index.

Definitions of Financial Terms

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