PMI Composite Flash
Definition of 'PMI Composite Flash'
The PMI Composite Flash is calculated by surveying a representative group of purchasing managers in the manufacturing and services sectors, asking them to report on various factors such as production, new orders, employment, supplier deliveries, and prices. The survey responses are then compiled and weighted to produce a single index number, which is reported as a percentage. A reading above 50 indicates expansion in the sector, while a reading below 50 indicates contraction.
The PMI Composite Flash is considered a leading indicator of economic activity, as changes in the PMI often precede changes in other economic indicators such as GDP and employment. The PMI Composite Flash is closely watched by investors, economists, and policymakers as a gauge of overall economic health and as a tool for forecasting future economic trends.
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