Investing 101 !

PMIs are surveys of companies that ask how business is doing. They are quality leading macro data and should be observed carefully. PMI stands for Purchasing Managers' Index.

The companies who produce PMIs, such as ISM in the US, send out questionnaires to large groups of companies, asking questions like “_are inventories higher or lower than last month?_”.

The results are published as a percentage of positive responses. So if the Inventory PMI is at 60, it means that 60% of companies queried have higher inventories compared to last month.

PMI surveys have many questions but the most important one, the one you should focus on, is New Orders: “_is business better or worse than last month?_”.

New Orders are among the earliest gauge of macro growth available. Keep an eye on them in the first days of each month.

So in conclusion you should decompose ‘US ISM Manufacturing New Orders PMI’ like so:

-🇺🇸 US: The Land of the Free and Home of the Brave – this implies that you can have China or Japan or Italy PMIs as well
-📦 ISM: Institute for Supply Management, a non-profit organization that conducts the survey – other institutions do the same job across the world, IHS-Markit being one of the key ones
-🏭 Manufacturing: the mega-sector aggregate of all manufacturing industries (as opposed to “service”) - you can have PMIs for any sector
-🧾 New Orders: new orders placed with a manufacturer - this is one of the survey questions, and the full list includes Inventories, Input Prices, Output Prices, Employment Costs, and much more
-🙋 PMI: an index based on a survey – PMIs as a whole are a vast category of data



US ISM Manufacturing New Orders PMI

Economic Indicators

PMIs are surveys that ask companies “_How is business going compared to last month, better or worse?_” via a questionnaire made of several questions - how is business, are you hiring, are prices rising, etc….The acronym means “Purchasing Manager Index”.

The PMI for each question is expressed as the % of companies that reply “better”. New Orders PMIs in particular are the index built around the question “Is new business coming in better or worse than last month?” and are oftentimes leading the rest of the PMI complex.

New Order PMIs are the fastest gauge of trend for an industry or a whole economy. Since they are released at the beginning of the month for the previous month, they provide a much timelier alternative to GDP.

Generally high New Orders mean an economy that is doing well and low new orders mean an economy that is doing poorly.