Purchasing Managers' Index (PMI)
Context:
ü India’s manufacturing sector growth decelerated to a two-year low in December 2025.
ü The seasonally adjusted HSBC India Manufacturing Purchasing Managers’ Index (PMI) fell to 55.0, down from 56.6 in November
ü This marks the weakest improvement in the sector since December 2023
Key Trends:
ü While the sector continues to expand (PMI > 50), the rate of growth for new business orders, production, and employment has slowed significantly
ü New export orders rose at their slowest pace in 14 months.
ü Although manufacturers expect output to rise in 2026, overall business sentiment has dropped to its lowest level in nearly three-and-a-half years.
● About PMI:
ü The PMI is an economic indicator derived from monthly surveys of private sector companies.
ü It tracks variables such as output, new orders, and employment
ü The figure is compiled by S&P Global and released by HSBC
● Interpretation of PMI:
ü PMI of above 50 indicates expansion in activity
ü PMI of below 50 indicates contraction.
ü PMI of at 50 indicates no change.
● Significance:
ü It provides an early indication of economic health, often released before official GDP data.