ISM Services PMI
The ISM Services Purchasing Managers’ Index (PMI) is an economic indicator published by the Institute for Supply Management (ISM) in the United States. It measures the activity level of the non-manufacturing sector, which includes services such as retail, real estate, healthcare, and other industries.
The ISM Services PMI is based on a monthly survey of purchasing managers from various industries in the services sector. These managers provide insights into various aspects of their businesses, such as new orders, employment, supplier deliveries, and inventories. The index is calculated using diffusion indices, where a reading above 50 indicates expansion in the sector, below 50 indicates contraction, and a reading of 50 suggests no change.
Key components of the ISM Services PMI include:
- Business Activity/Production: Indicates the level of business activity and production in the services sector.
- New Orders: Reflects the volume of new orders received by service providers.
- Employment: Measures the employment conditions within the services sector.
- Supplier Deliveries: Reflects the delivery times of suppliers to service providers.
- Inventories: Measures changes in business inventories in the services sector.
The ISM Services PMI is a closely watched economic indicator because the services sector constitutes a significant portion of the overall economic activity in many countries. It provides valuable insights into the health and direction of the non-manufacturing sector, helping analysts, policymakers, and investors assess the overall economic performance.
It’s important to note that the ISM Services PMI is specific to the United States. Other countries may have similar indices, such as the Purchasing Managers’ Index for the services sector in the Eurozone or other regions. These indices serve similar purposes but focus on the specific economic conditions of their respective regions.
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