The S&P Global HSBC India Manufacturing Purchasing Managers' Index (PMI) is a monthly economic indicator that serves as a timely gauge of the health of India's manufacturing sector. It is a concept and a diffusion index compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers, stratified by sector and company size. Data collection for the India Manufacturing PMI began in March 2005. The index was created to provide an up-to-date, accurate, and unique monthly indicator of economic trends, which is closely watched by central banks, financial markets, and business decision-makers globally.
The mechanism works by surveying purchasing managers in the second half of each month to indicate the direction of change compared to the previous month. The headline PMI figure is a weighted average of five key indices: New Orders (30%), Output (25%), Employment (20%), Suppliers' Delivery Times (15%), and Stocks of Purchases (10%). The index varies between 0 and 100, where a reading above 50 indicates an overall expansion or improvement in the manufacturing sector compared to the previous month, while a reading below 50 signals a contraction. The Suppliers' Delivery Times Index is inverted in the calculation so that it moves in a comparable direction to the other indices. The index connects to the broader HSBC India Composite PMI, which combines the manufacturing and services sectors to provide a view of the overall private sector economy. The index was previously known under different sponsors but is currently branded with HSBC and compiled by S&P Global. The core methodology and the five components of the index have remained the same, though the sponsorship and the compiling entity have changed over time.