ISM Manufacturing Index

Search Dictionary

Definition of 'ISM Manufacturing Index'

The ISM Manufacturing Index, also known as the Purchasing Managers' Index (PMI), is a monthly survey of manufacturing companies in the United States conducted by the Institute for Supply Management (ISM). The survey collects data on various aspects of the manufacturing sector, including new orders, production, employment, supplier deliveries, and inventories.

The index is based on a diffusion index methodology, where values above 50 indicate expansion in the manufacturing sector, while values below 50 indicate contraction. The higher the index value above 50, the greater the rate of expansion, and vice versa.

The ISM Manufacturing Index is considered a leading economic indicator as it provides insights into the health of the manufacturing sector and broader economic conditions. A higher index value suggests strong economic activity, while a lower value indicates weak economic conditions. Additionally, the survey provides information on the challenges and opportunities facing manufacturers, such as changes in input costs, supply chain disruptions, and changes in consumer demand. This information can help businesses and policymakers make informed decisions about their operations and policies.

Do you have a trading or investing definition for our dictionary? Click the Create Definition link to add your own definition. You will earn 150 bonus reputation points for each definition that is accepted.

Is this definition wrong? Let us know by posting to the forum and we will correct it.