The calculation formula of PMI index is as follows: PMI= order ×30%+ production ×25%+ employee ×20%+ distribution ×15%+ inventory ×10%.
Purchasing managers' index is expressed in percentage, and 50% is often used as the dividing point of economic strength: that is, when the index is higher than 50%, it is interpreted as a signal of economic expansion. When the index is below 50%, especially very close to 40%, there is concern about economic depression. It is a very important subsidiary indicator in leading indicators. In addition to paying attention to the overall index, the price index paid and the price index charged in the purchasing managers' index are also regarded as one of the price indicators, and the employment index is more often used to predict the unemployment rate and the performance of non-agricultural employed people.
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