A purchasing managers index collects data from purchasing managers in the manufacturing industry. This information is used to assess industry conditions and to forecast future growth – or lack thereof – in the sector. The Institute for Supply Management is a well-known producer of PMIs (ISM).

The ISM contacts purchasing managers at more than 300 manufacturing companies of various sizes and locations for its PMI.

The Purchasing Managers' Index (PMI) is a widely used economic indicator that provides insights into the health of a country's manufacturing sector. Compiled by surveying purchasing managers in various industries, the PMI measures factors such as new orders, production levels, employment, supplier deliveries, and inventory levels.

A PMI above 50 typically indicates expansion in the manufacturing sector, suggesting economic growth, while a reading below 50 suggests contraction. The survey responses are weighted, aggregated, and then reported as a single numerical value.

Purchasing managers, who are responsible for making procurement decisions, provide valuable real-time data about the overall economic environment. Investors and policymakers use PMI data to assess economic trends, make informed decisions about investments, and gauge the effectiveness of economic policies. The PMI serves as a forward-looking indicator, offering a snapshot of economic activity and helping stakeholders anticipate potential shifts in the business cycle.