PMI — Manufacturing & Services Indicators
Overview
Purchasing Managers' Index (PMI) surveys are leading economic indicators released monthly for manufacturing and services sectors, giving traders an early read on economic momentum before GDP data is published. PMI data moves stock indices, commodity prices, and currency pairs — particularly around ISM and S&P Global releases. This guide teaches you how to interpret PMI sub-components like new orders and employment, and how to use them as part of a macro trading strategy. For deeper context on how PMI fits into the broader economic picture, explore our macro academy.
Key Takeaways
- PMI above 50 = expansion; below 50 = contraction.
- ISM Manufacturing PMI and S&P Global PMI are the key US releases.
- The New Orders sub-component is the most forward-looking part of the PMI report.
- China's Caixin PMI and the Eurozone PMI move commodity currencies and European stocks.
Practical Tips
- PMI tends to lead GDP by 1-2 quarters — use it as an early-warning system.
- Rising PMI + falling inventory sub-index signals an incoming restocking cycle (bullish for industrials).
- Watch for divergence between manufacturing and services PMI — it signals sector rotation.
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