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Fundamental analysis

Purchasing Managers’ Index (PMI)

By Jarosław Wasiński • Published: • Updated:
A survey-based business indicator, usually constructed as a diffusion index. For activity measures, above 50 generally indicates more improvement and below 50 more deterioration relative to the previous month. It is not a percentage change in output or GDP. Coverage, components, schedules and flash availability depend on the provider; FX interpretation requires the surprise and context.
Example.

In a hypothetical simple survey, 40% of firms report an increase, 30% no change and 30% a decrease. The diffusion index is 40 + 0.5 × 30 = 55. This does not mean output grew by 5% or 55%.

What the survey measures

PMI describes the distribution of responses, not output volume directly. A headline index may combine weighted components. Methodology and sector coverage depend on the provider.

The 50 threshold and pace

For activity measures, above 50 generally indicates more improvement and below 50 more deterioration from the preceding month. A fall from 58 to 55 means slower improvement, not necessarily falling activity. Prices and delivery times require their own interpretation.

Flash estimates and expectations

An early flash sample can differ from the final release. Match the sector and series to consensus and examine components. Crossing 50 alone supplies neither a currency edge nor a certain policy change.

Primary source checked 11 October 2026: www.spglobal.com.

FAQ

Does PMI 48 mean GDP fell 2%?

No. A diffusion index is not a percentage GDP change, and one sector does not cover an entire economy.

Does every PMI have a flash release?

No. Check the schedule and release coverage for the particular provider and series.

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Jarosław Wasiński

Editor-in-chief, ForexMechanics.com • Macro & FX analyst

Independent analyst and practitioner with over 20 years of experience in financial markets. Actively involved in Forex since 2007, with a focus on fundamental analysis, OTC market structure, and disciplined capital risk management.

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