Purchasing Managers’ Index, or PMI, is an economic indicator which is derived after monthly surveys of different companies. The index shows trends that exist in the manufacturing and service sectors. It can help in determining whether current market conditions are expanding, contracting, or remaining relatively static. Manufacturing PMI sees the questionnaire sent to manufacturing companies. These surveys are conducted monthly.
A manufacturing PMI above 50 indicates that business activity is expanding. Meanwhile, a manufacturing PMI less than 50 indicates that business is contracting.
In the month of October 2023, manufacturing PMI in China fell to an eight-month low. This was primarily due to a sharp loss in demand. Despite the setback, manufacturing PMI was still recorded at 55.5, which points to economic expansion. Still, that was down from 57.5 in the month of September.
Chinese manufacturing was hit by worsening cost pressures as well as a decline in the consumer goods sub sector. Growth in international sales has remained historically strong. Unfortunately, China lost some of that momentum in the month of October.
India, on the other hand, delivered a very strong uptick in manufacturing in the month of October. The country has emerged as a strong rival to China. By 2050, India is projected to be the third largest economy on the planet behind China and the United States.
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