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DevDosh Ltd is please to report that the UK Manufacturing Purchasing Managers Index is up to 51.9 from 50 in the previous month. That figure beats market consensus which predicted a drop to 49.7.

But why is the Purchasing Managers Index figures so important to the economy?

The UK Manufacturers Purchasing Managers Index (PMI) is a forward looking economic indicator. It shows the prevailing direction of the manufacturing sector. The PMI is based on surveys conducted by the institute of supply management on a monthly basis. The surveys are sent to top executive level supply chain managers across multiple industries.

The surveyed industries are involved at all stages of manufacturing through flow and so illustrate an overview of the entire sector. Also the questions targets 5 key areas of the manufacturing process. Namely; new orders, inventory levels, production, supplies and deliveries. The survey also asks about business changes and if conditions are improving, staying the same or worsening.

The headline of the PMI is a number between 1 and 100. Any number 50 or above means that the manufacturing industry is prospering and expanding. Any number below 50 means that the manufacturing industry is contracting.

The PMI is used heavily by business people, market analysts and investors. It is part of the critical decision making tools suite for investors and is an essential forward indicator. Understandably which ever way the PMI is heading is a direct indication as to where the economy is heading. If the PMI is increasing it is because large manufacturers are expecting to make more products to sell. That means that they have more orders from their suppliers. It also means that to fulfill those orders the manufacturers will have to buy multiple parts and raw materials.

DevDosh Ltd like many is pleased to see the UK Manufacturers PMI increase by so much so quickly and genuinely and truly hope it is a sign of things to come.