Purchasing Managers Index

The Purchasing Managers Index (PMI) is an important indicator of manufacturing conditions. It reflects changes in manufacturing production, new orders, inventories, employees, supplier deliveries, etc. PMI is a leading indicator that can predict economic trends and turning points. The PMI is calculated by taking the weighted average of these data to obtain a percentage value between 0 and 100. Generally speaking, a PMI above 50 indicates manufacturing expansion, while a PMI below 50 indicates contraction.

Different countries and regions have different organizations responsible for compiling and publishing PMI data, such as the Institute for Supply Management (ISM) in the United States, the National Bureau of Statistics and HSBC in mainland China, and the China Economic Research Institute in Taiwan. These data can help investors, companies and policymakers understand the manufacturing performance and prospects of various markets and make appropriate decisions.

This article will introduce three major PMI data sources: the U.S. ISM Manufacturing Index, Mainland China Purchasing Managers Index and Taiwan Manufacturing Purchasing Managers Index, and analyze their latest developments and trends.

U.S. ISM Manufacturing Index

The U.S. ISM Manufacturing Index is one of the oldest and most influential PMI data in the United States. It is published monthly by the Institute for Supply Management (ISM) and covers survey results of approximately 300 manufacturing companies. The ISM manufacturing index consists of five sub-indexes, namely new orders, production, employees, supplier deliveries and inventories, each accounting for a 20% weight. According to ISM research, when the ISM manufacturing index is higher than 42.9, it means that the overall U.S. economy is in a growth stage; when it is lower than 42.9, it means that the overall U.S. economy is in a recession stage.

According to the latest data, the U.S. ISM manufacturing index in April 2023 was 60.7, an increase of 2.3 percentage points from the previous month, hitting the second highest level since December 1983, showing that the U.S. manufacturing industry still maintains strong growth momentum. Across the five sub-indices, new orders, production, employees and supplier deliveries all improved, while inventories fell. The interviewed companies generally reported strong demand, high capacity utilization, rising raw material prices and high pressure on the supply chain.

Mainland China Purchasing Managers Index

There are two main sources of the purchasing managers index in mainland China: one is the official version jointly released by the National Bureau of Statistics of mainland China and the China Federation of Logistics and Purchasing; the other is the private version jointly released by the British Markit Company and HSBC Bank. Both cover survey results from about 500 manufacturing companies, but the official version focuses on large and state-owned companies, while the private version focuses on small, medium and private companies. Both include manufacturing PMI and service PMI.

According to the latest data, in April 2023, the official manufacturing PMI of mainland China was 51.1, a decrease of 0.4 percentage points from the previous month; the private manufacturing PMI was 50.8, an increase of 0.6 percentage points from the previous month. Both show that mainland China's manufacturing industry still maintains slight growth, but the growth rate has slowed down. The two also differ in sub-indices: in the official version, new orders, production, employees, supplier deliveries and inventories all decreased; in the private version, new orders, production, employees and supplier deliveries all increased. rose, while inventories fell. The interviewed companies generally reported that market demand is recovering, export orders are increasing, raw material prices are rising, and labor costs are rising.

Taiwan Manufacturing Purchasing Managers Index

The Taiwan Manufacturing Purchasing Managers Index is released monthly by the Taiwan-based China Economic Research Institute and covers survey results of approximately 350 manufacturing companies. Taiwan's manufacturing purchasing managers index consists of five sub-indexes, namely new orders, production, employees, supplier deliveries and inventories, each with different weights: new orders 30%, production 25%, employees 20%, suppliers 15% on delivery and 10% on inventory.