what is ism manufacturing pmi

The ISM Manufacturing PMI (Purchasing Managers Index) is a monthly indicator of economic activity based on a survey of purchasing managers in over 400 manufacturing companies in the United States. The ISM Manufacturing Index is published at the beginning of each month and is a composite index that gives equal weighting to new orders, production, employment, supplier deliveries, and inventories. The index is calculated as a diffusion index, which is presented as a number that indicates whether the manufacturing sector is growing or contracting. A PMI reading over 50% means the sector is growing compared to the previous month, while a PMI reading under 50% means the sector has month-over-month contracted. The ISM Manufacturing PMI is considered to be a leading indicator of economic trends, outlining long-term trends that have been building over time based on prevailing economic conditions.