Purchasing Managers’ Indices (PMIs) have been specially developed to provide economic analysts, purchasing professionals, business decision-makers and policy makers with accurate and timely data to help better understand business conditions. In particular:
- central banks in many countries use the data to help make interest rate decisions;
- analysts in the financial markets use PMI data to reliably forecast official data such as GDP;
- forecasters and planners in the corporate sector use the PMIs to help anticipate changing business conditions and to benchmark performance.
The HSBC India Services PMI is based on data compiled from monthly replies to questionnaires sent to purchasing executives in around 350 private service sector companies.
The HSBC India Composite PMI is a weighted average of the Manufacturing Output Index and the Services Business Activity Index, and is based on original survey data collected from a representative panel of over 800 companies based in the Indian manufacturing and service sectors.
Survey responses reflect the change, if any, in the current month compared to the previous month based on data collected mid-month. For each of the indicators the ‘Report' shows the percentage reporting each response, the net difference between the number of higher/better responses and lower/worse responses, and the ‘diffusion' index. This index is the sum of the positive responses plus a half of those responding ‘the same'.
Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change. An index reading above 50 indicates an overall increase in that variable, below 50 an overall decrease.
October Month PMI report
Growth of activity in the Indian private sector economy slowed to weakest pace in
ten months in September
It shows the growth which happened from the start of this year is slowing a bit and next month report will give a confirmation for this trend.With the Hot money coming into India it will be tough task for RBI to maintain exchange rate ,interest rate and inflation all Hitting at the same time .India's service industry is stepping off the throttle. Along with the manufacturing sector, growth is slowing, although the expansion continues. Price pressures, however, have not eased meaningfully, which represents a challenge for the central bank. The pace of hiring has slowed as well,even if it remains in positive territory. All this suggests a mild easing of demand growth since the red-hot pace earlier this year, but is hardly enough to relax the guard on inflation. Monetary officials may still need to tighten further to avert price pressure from becoming entrenched