Business activity index pmi. What is the PMI index and the impact of the level of business activity on Forex. Saudi Arabia PMI chart

The US manufacturing purchasing managers' index (PMI) improved over the past month, unexpectedly rising to 57.7% from 56% a month earlier, data from the Institute for Supply Management (ISM) showed.

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The index of business activity in US manufacturing (ISM Manufacturing) unexpectedly increased in February 2017 and reached 57.7% compared to 56% in January, according to the American Institute of Supply Management (ISM).

Analysts polled by Reuters expected the indicator to remain at the January level. Thus, the data has encouraged the market and suggests that the market business activity is holding up and the economy is picking up pace.

The situation also improved with consumer incomes, which increased last month by 0.4%, and expenses by 0.2%. Analysts had expected the income-expenses growth pair to increase 0.3% on a monthly basis.

At the same time, according to the research organization Marit Economics, the index of business activity in the manufacturing sector in the United States worsened in February 2017 to 54.2 points compared to 55.0 points a month earlier. Thus, the indicators turned out to be lower than the forecasts of analysts, who bet on 54.4 points.

The report states that manufacturing activity in the US is on track to expand and develop at a rapid pace. Although the latest recovery was slightly weaker than seen at the start of 2017, this largely reflected moderation in new orders growth after hitting a 28-month peak in January, along with a slightly weaker increase in output. Meanwhile, manufacturers reported a steady rise in inventory levels, driven by larger production schedules and expected improvement in customer demand.

As previously reported, the eurozone manufacturing PMI is at a 6-year high. The Purchasing Managers Index (PMI) in the manufacturing sector of 19 eurozone countries rose to 55.4 points in February 2017 compared to 55.2 points a month earlier, according to final data from the research organization IHS Markit.

The indicator hit a 70-month high, reflecting the most significant improvement in operating conditions in nearly six years.

The preliminary estimate was 55.5 points.

"Businesses clearly expect favorable conditions to continue. Firms are more optimistic about the outlook this year than at any time since the region's debt crisis," said Chris Williamson, senior economist at IHS Markit. "Companies are reporting stronger demand both domestically and in export markets, with the weakening euro supporting sales growth."

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Greece continues to show a decline in manufacturing activity, while other countries are showing positive dynamics. At the same time, the Netherlands, Austria and Germany recorded the maximum growth in manufacturing PMI, Williamson said.

An indicator of activity in the German manufacturing sector rose from 56.4 points in January to 56.8 points in February. The indicator reached its maximum since May 2011.

France's manufacturing PMI fell from 53.6 to 52.2 last month. The indicator reached its lowest level in three months.

Meanwhile, the Italian manufacturing PMI rose from 53 to 55 points, reaching its highest level since December 2015.

Spain's manufacturing PMI stood at 54.8 in February, down from 55.6 the month before. Despite the decline, the indicator continues to demonstrate a significant improvement in operating conditions in the Spanish manufacturing sector.

At the same time, the indicator of activity in the Greek manufacturing sector increased from 46.6 points in January to 47.7 points in February. The PMI showed a decline in business activity in the country's manufacturing sector for the sixth month in a row, although the rate of decline was lower than the previous month.

Today, data was also released on the Russian market; the PMI index of Russian manufacturing industries dropped to 52.5 points in February compared to 54.7 points in January, according to IHS Marit data.

Thus, Russia's manufacturing PMI hit a 4-month low last month, but continued to indicate a significant improvement in market conditions relative to the long-term average.

An indicator below 50 points reflects a decrease in activity, above - an increase in activity.

Source: IHS Markit

Production volumes and new orders continued their strong growth in February. However, the increase was the smallest since September, reflecting slower growth in the sector as a whole.

The growth of new orders was again restrained by the fall in export orders, which has been observed for three and a half years.

The rate of employment growth also slowed in February. Some companies hired additional staff to increase production capacity, while others streamlined operations by cutting jobs.

Purchasing activity in the manufacturing industry also decreased, but growth rates remained significant and were above long-term averages. At the same time, inventories of finished products and raw materials decreased.

Purchase prices rose again in February, but inflation rates were the second lowest in four years.

Despite slower activity last month, companies expect rising demand, new long-term contracts and renewed economic growth to boost output over the next 12 months.

"February data continues to point to a healthy sector. Market conditions have improved in line with long-term averages. Most encouragingly, optimism was at its strongest since May 2015," said Paul Smith, senior economist at IHS Markit.

At the same time, earlier the growth of manufacturing activity in the US slowed down in February compared to the previous month, being less than analysts' expectations. Companies began to spend and invest less.

The manufacturing business activity index (ManufacturingPMI) in the US manufacturing sector fell to 54.3 points in February from 55.0 points a month earlier, according to data from Markit Economics, which calculates this indicator. Analysts surveyed expected a slight decline to 54.7 points

The Business Activity Index (ServicesBusinessActivityIndex) in the US service sector declined from 55.6 points in January to 53.9 points in February. Although analysts had predicted an increase to 55.8 points, preliminary data from IHS Markit shows.

Thus, the slowdown in growth rates in the services sector in February suggests that there is a significant decline in the volume of new orders, and this was the worst indicator in the last five months. The services business activity index in February is also at its lowest level since September 2016.

"In February, we saw a sharp rebound in the manufacturing and services business activity indexes. This suggests that companies have become more cautious in their spending and investments. Overall, the indices remain level and correspond to economic growth of 2.5 % year-over-year in the first quarter," said Chris Williamson, chief economist at IHS Markit.

As previously reported, the US service sector PMI rose to 51.9 points in September. The Purchasing Managers Index (PMI) in the US services sector rose to 51.9 points in September 2016 from 51 points in August, preliminary data from IHS Markit show.

An indicator below 50 points reflects a decrease in activity, above - an increase in activity.

The growth in business activity in the service sector in September was the highest since April.

At the same time, the US service sector recorded a decline in business confidence.

"The services sector showed mixed signals in September, with faster growth in activity during the month offset by gloomy leading indicators. While business activity posted its strongest gain since April, new business flows slowed and employment growth was the weakest in three and a half years. Optimism weakened "The outlook for next year is clouding the outlook to near post-crisis lows," said Chris Williamson, chief economist at IHS Markit.

"Furthermore, even with the recent surge in activity, overall economic growth remains weak. When these services sector results are added to industrial production data, business activity indices indicate that the economy is growing at an annual rate of only about 1% in III quarter," the expert said.

Among various economic indicators, the PMI index has a great influence. Considering that after the publication of its values, the market often goes on fire and quotes rush in one direction, you should understand what this indicator means and how to interpret it in order to improve the quality of trading and, accordingly, profit from trading.

Designation

The Manufacturing Activity Index (PMI) is an important statistical report. It is prepared on the basis of surveys among managers (top managers) involved in the industrial segment. As a result, current data on the optimal level of pricing is collected, trends in the development of the business sector, as well as the entire country’s economy, are calculated. Such conclusions are made based on a comparison of the information received from managers with previously published figures. Thus, in the process of comparative analysis, differences in industrial volumes, the number of orders received in the manufacturing sector, existing inventories of goods and the intensity with which suppliers of raw materials operate are measured. It is worth remembering that the PMI index also has a second name, which may appear in some sources - NAPM.

How is PMI calculated?

The index under consideration consists of five important components, each of which has its own rigidly fixed percentage ratio in the overall value of 100%. Yes, it contains

• the number of new orders in the production segment (new orders), which are allocated 30%;
• the employment rate is 20%;
• production volumes 25%;
• inventory indicator 10%;
• activities of suppliers (supplier deliveries) 15%.

In order to determine the values ​​of these individual factors that add up to the total percentage for a given period, all managers are asked a series of simple questions. In this case, the answers do not imply a detailed nature, but must correspond to the option used in the tests, that is, “yes”, “has not changed” and “no”.

The questions themselves are designed in such a way that the structure of the answers allows you to make an objective logical conclusion regarding the current indicator that the PMI index will demonstrate. But it is necessary to take into account that people’s answers are still not without subjectivity, therefore the value of this economic indicator always contains a psychological factor that must be taken into account during trading. This is no secret for experienced traders, but beginners must learn to connect them with the general atmosphere that reigns at that moment in the market when analyzing the released data.

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Key questions from participants

In order to obtain a comprehensive analysis and compile the PMI production activity index, survey participants will be asked for their opinions regarding:

• intensity of production volumes (Production);
• number of new orders for export (New export orders);
• commodity value (Commodity prices);
• level of employment (Employment);
• deliveries (Vendor deliveries);
• import volumes (New import orders);
• the number of orders received from customers (New orders);
• volumes of goods for short-term deliveries (Items in short suddenly);
• state of the portfolio of unfulfilled orders (Order backlogs).

How to use economic indicator values

The US PMI is usually released on the first business day of the new month. This event occurs at 10:00 am EST. This is local time in Washington. In Moscow it will already be 18:00 at that time. The National Association of American Managers conducts surveys and prepares conclusions based on them.

Below we will describe how the economic indicator in question affects the sentiment of market participants. It is worth noting that this is a very important point, since all pairs are somehow related to the dollar, which means their rates may change significantly after the publication of the indicator. But in order to speed up the cases of successful transactions, it is also worth using the PMI index of Russia for trading, which will create volatility in USD/RUB and EUR/RUB, as well as similar indicators of Germany and France - the largest developed countries of the Eurozone, whose economic indicators are reflected in the course Euro.

Specifics of influence

It should be noted that the PMI business activity index should not be interpreted based on its momentary values. The specificity of its influence lies in the accuracy of determining economic cycles in the long term. So, for example, if the output value exceeds the 50% level, you can expect that the greatest increase in business cycles will be recorded after seven months.

At the same time, if negative values ​​are released that are below the 50% barrier, one can expect the largest possible drop in business cycles already 3 months after the publication date. In addition, investors pay special attention to the important psychological threshold, which is set at 44%. In cases where the PMI index falls below this important level, holders of large capital will begin to sell the US dollar, as they will expect a recession, that is, a decline in the US economy. Such weak data always indicates a slowdown in GDP growth.

It is also necessary to take into account that a decrease in value to 35% is a sure economic stagnation, which indicates serious problems in the country’s economy, which, naturally, will be directly reflected in the exchange rate of the national currency. At the same time, if the index remains above the 44% mark, then the reaction of investors will be ambiguous, since such values ​​usually indicate the possibility of a rapid recovery, and, therefore, such data do not provide serious reasons for concern. Again, in addition to dry numbers, you need to take into account the general economic situation in the country and market sentiment.

Bottom line

Thus, the PMI index is one of the leading economic indicators, which allows one to quite accurately determine the state of the economy and, more importantly, the level of its stability. In combination with other similar indicators (index of price redistribution and industrial production), investors determine the safety of long-term investments in the United States economy.

PMI (Purchasing Managers Index) business activity index in the manufacturing sector calculated based on data provided by purchasing managers on production volume items, new orders, inventory levels and employment. PMI is one of the key indicators of the state of the economy of the country issuing the indicator.

PMI Index Calculation

The PMI index consists of five important components, each of which has its own strictly fixed percentage ratio in the overall value of 100%:

• the number of new orders in the production segment (new orders), which are allocated 30%;
• the employment rate is 20%;
• production volumes 25%;
• inventory indicator 10%;
• activities of suppliers (supplier deliveries) 15%.

In order to determine the values ​​of these individual factors that add up to the total percentage for a given period, all managers are asked a series of simple questions. In this case, the answers do not imply a detailed nature, but must correspond to the option used in the tests, that is, “yes”, “has not changed” and “no”.

The questions themselves are designed in such a way that the structure of the answers allows you to make an objective logical conclusion regarding the current indicator that the PMI index will demonstrate.

To compile the PMI manufacturing activity index, managers - survey participants - will be asked for their opinions regarding:

• intensity of production volumes (Production);
• number of new orders for export (New export orders);
• commodity value (Commodity prices);
• level of employment (Employment);
• deliveries (Vendor deliveries);
• import volumes (New import orders);
• the number of orders received from customers (New orders);
• volumes of goods for short-term deliveries (Items in short suddenly);
• state of the portfolio of unfulfilled orders (Order backlogs).

How does the publication of the manufacturing PMI affect exchange rates?

Exceeding value 50 indicates the growth of the manufacturing sector and is a positive factor for the national currency. A PMI reading below 50 indicates a slowdown.

PMI index in the manufacturing sector, it refers to survey or diffusion indices and allows you to track the dynamics of the economic cycle, being a leading indicator. The observed close correlation of the manufacturing PMI index with economic dynamics allows us to predict future growth rates.

It should be noted that the PMI business activity index should not be interpreted based on its momentary values. The specificity of its influence lies in the accuracy of determining economic cycles in the long term. So, for example, if the output value exceeds the 50% level, you can expect that the greatest increase in business cycles will be recorded after seven months.

It is also necessary to take into account that a decrease in value to 35% is a sure economic stagnation, which indicates serious problems in the country’s economy, which, naturally, will be directly reflected in the exchange rate of the national currency. At the same time, if the index remains above the 44% mark, then the reaction of investors will be ambiguous, since such values ​​usually indicate the possibility of a rapid recovery, and, therefore, such data do not provide serious reasons for concern.

When are PMI manufacturing activity indices published?

Eurozone countries and Great Britain

• Publication date: twice a month (preliminary and final indexes)
• Source: Markit Economics
• Website: www.markiteconomics.com/Survey/Page.mvc/PressReleases

• Publication date: monthly
• Source: Institute for Supply Management (ISM)
• Website: www.instituteforsupplymanagement.org/ISMReport

China

• Publication date: monthly
• Source: Hongkong and Shanghai Banking Corporation
• Website: www.hsbc.com

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ISM Services Index is an index of business optimism in the services sector. This indicator characterizes the opinion of managers about the changes taking place in this industry. A value below 50 indicates a slowdown in economic development.

At 15:00 ISM data for the USA was released. Predicted value: 56.6. Actual value: 57.0. Since the actual value is higher than the predicted value, it should probably be expect growth exchange rate of the US dollar against other currencies. As you can see from the chart below, the USD/JPY exchange rate market reacted with growth dollar.

Rice. The impact of US data on the USD/JPY rate. The moment of data release is marked with an arrow.

Data release time:

Note: ISM is the former NAPM Services Index (National Association of Purchasing Managers Index).

Service Activity Index

The index represents the results of a survey of service industry managers to assess changes taking place in this industry. Values ​​below 45 are an indicator of a slowdown in economic development. Often the value of this index is influenced by psychological factors rather than the actual state of affairs. The process of consumption of services tends to change at a relatively constant speed, therefore psychological factors influence sharp changes in the value of this indicator.

At 09:30 GMT data on the index of activity in the UK services sector was released. Predicted value: 51.0. Actual value: 54.5. Since the actual value is better than the predicted value, it should probably be expect growth reacted with growth pound.

Rice. Impact of UK data on the GBP/USD exchange rate. The moment of data release is marked with an arrow.

Data release time:

an important economic indicator, compiled on the basis of a survey of a number of professional managers, regarding the improvement or deterioration of the situation in the main microeconomic indicators of the country’s economy

Definition of business activity index, types of business activity index, structure of business activity index, methodology for constructing business activity index, calculation of business activity index, publication of business activity index, interpretation of business activity index data, regional examples of business activity index, graphs of business activity index data of countries of the world

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Business activity index is the definition

Business Activity Index - This a report based on the results of a survey (managers) in the field, used to assess changes in industry volume, the number of new production orders, as well as the speed of work of suppliers, the purpose of which is to provide information on the formation of prices, business trends and the economy as a whole.

Business Activity Index - This general state of the economy, published monthly by managers and the Kommersant Publishing House.

Business Activity Index - This a special numerical indicator used in economics and used to reflect the state of a certain industry, the state of the economy, and assess the market situation.

What is the Business Activity Index? - This an index characterizing changes in economic conditions in various sectors of the economy.

Business Activity Index, what is it? - This a leading indicator generated in the form of a report based on the results of a survey of managers (purchases in the industrial sector).

Business activity index, where - This an aggregated purely subjective indicator that reflects only the participants’ perception of the current economic environment and business prospects.

Business Activity Index, where it is - This an indicator of business optimism among business participants, regularly published (under the names PMI) in the USA, England and, where it is created by the relevant associations and is used both to assess the direction of public opinion and to measure objective indicators.

What is the business activity index?

The term “business activity” began to be used in domestic accounting and analytical literature relatively recently - in connection with the introduction of methods widely known throughout the world based on a system of analytical coefficients. Of course, the interpretation of this term may be different.

Today, business activity is considered from three perspectives: the individual (micro level), the country (macro level). At the enterprise level, business activity is most often considered as the performance of the enterprise relative to the amount of advanced resources or the amount of their consumption in production. This definition practically combines the concept of business activity and operational efficiency.

From the position of sociologists, business activity is a set of actions that contribute to the economic growth of an organization (including the production and marketing system) based on the coordinated development of its components in harmony with the external environment. In a broad sense, business activity means the entire range of efforts aimed at promoting products, labor,... In the context of the analysis of financial and economic activities, this term is understood in a narrower sense - as the current production and commercial activities of the enterprise; in this case, the phrase “business activity” is perhaps not a completely successful translation of the English term “business activity”, which precisely characterizes the corresponding group of coefficients from the system of indicators.

United States Business Activity Index Review

US PMI chart

Euro Area PMI chart

China PMI chart

Japan PMI chart

Germany PMI chart

UK PMI chart

France PMI chart

Brazil PMI chart

Italy PMI chart

India PMI chart

Russian business activity index chart

Canadian Business Activity Index chart

Australian Business Activity Index chart

South Korea PMI chart

Spain Business Activity Index chart

Mexico PMI chart

Indonesia PMI chart

Turkey PMI chart

Saudi Arabia PMI chart

Sweden PMI chart

Methodology for constructing a business activity index

After calculating the results for each of the 10 listed categories, a diffusion index is displayed. Adjustments for seasonality are made only for four of the 10 points: business activity, new orders, employment and. With a core PMI reading of 50, purchasing managers' expectations for growth and decline are split in half. A reading above 50 indicates increasing activity, while a reading below 50 means activity is decreasing. From its earliest publications in 1998 to the present day, the ISM non-manufacturing business activity index has rarely fallen below 50%.

Components of the business activity index

Respondents are asked to answer questions about whether their business activity has increased, decreased or remained unchanged in 11 areas.

Service business activity (PMI)

Business activity is a criterion for changes in the level of business activity in the service sector. It presents the results of a survey of service industry managers to assess changes taking place in this industry. Figures below “45-50” are an indicator of a slowdown in economic development. Often the value of this index is influenced by psychological factors rather than the actual state of affairs. The process of consumption of services tends to change at a relatively constant speed, therefore psychological factors influence sharp changes in the value of this indicator. Therefore, when analyzing the index, special attention is paid to this. Its value is published on the first day of each month at 10:00 EST (New York) one day after the publication of the ISM index. Has limited impact on the market. An increase in the value of this index is a favorable factor for the growth of the exchange rate.

New orders

New orders - reflects changes in the number of new orders received from customers. The value of orders received by firms in sectors in which goods are made to order rather than first produced and then sold. These are primarily the construction industry and those manufacturing industries that sell capital goods. Changes in the volume of new orders are one of the leading indicators of changes in economic activity.

Production

The production index is a relative indicator characterizing the change in the scale of production in the periods being compared. The production index is used to analyze the dynamics of the physical volume of production. There are individual and consolidated production indices. Individual reflect the change in the output of one product and are calculated as the ratio of the production volumes of a given type of product in physical terms in the periods being compared. Composite indices characterize aggregate changes in all types of products and reflect changes in the value created in the production process as a result of changes only in the physical volume of products produced. The index is an aggregated production index for the types of activities “Mining”, “Manufacturing”, “Production and distribution of gas and water”.

Employment

Backlog of orders

Benefits of the PMI

PMI surveys are the first indicators of economic health published monthly, well ahead of comparable data released by government agencies. Among the advantages of the Index of business activity indices are the following:

Provide reliable, fact-based indicators, as opposed to indicators based on opinions or expectations;

Released faster and more efficiently than comparable official data;

Issued on a monthly basis;

Cover the economic activity of virtually the entire private sector in many countries (including the most important service sector);

Results are not revised after publication;

Data preparation and release uses identical methodology for all countries, allowing direct international comparisons.

Example of calculating the business activity index

In many cases, the benefits of the data offered by PMI reflect the lack of official statistics, including:

Unevenness of publications. Many government series, such as GDP, are published only quarterly, whereas the Index of business activity is published monthly;

Published late. Quite a long period of time passes before official data is published. The data provided by the PMI is several months ahead of the official data;

Revisions to official data after initial publication. Official data is subject to significant revision even after it has been published. Such revisions are a problem when making business decisions based solely on such statistics. In contrast, PMI data are not revised after publication, except in very rare cases of seasonal adjustment;

Lack of comparison possibilities with equivalent calculations used in other countries. Not all statistical institutes operate data using identical methodologies. In the Eurozone, for example, for calculating GDP they use a significantly different statistical methodology from that used in Japan.

As a result, the above problems lead to a situation where purchasing managers and economic analysts are forced to examine the current state of the industry using data that is already out of date at the time of issue, and may be significantly revised after the first publication, which in turn will raise doubts when comparing data for other countries.

Examples of regional business activity indices

Economic cycles represent a natural form of economic development and are divided into three phases:

Recession phase, i.e. decline in business activity, decline in production, employment and income;

The recovery phase, reflecting the rise in economic activity, the growth of market conditions, the increase in the issue of securities to the previous level after its fall that took place during the recession;

The development phase characterizing the continuation of economic growth after the recovery phase.

The main idea of ​​compiling PMI indices is to show the cyclical dynamics of economic processes and reliably predict the turning points of cycles (recessions and rises), and therefore predict changes in business activity. Since the main motivation is the expectation of future profits, having positive forecasts, companies will expand the production of goods and services, increase investment in production capacity, etc. If a decline in income is predicted, the economic activity of companies decreases.

Historically, it has been noted that the maximums and minimums of indices precede economic reversals, i.e. downturn or upturn in the economic cycle. Thus, by tracking the behavior of the index, companies can make business decisions more effectively. In this sense, the business activity index can be called a “barometer” of the health of the economy and assessment of the prospects for its development in the short term. Therefore, indices are a good guide when making decisions both for economic entities and for analysts, scientists and politicians. In this case, indices may tend to outpace the overall dynamics or lag behind the main course of the economic cycle. On this basis, they are classified into: leading, lagging and coinciding economic indices.

PMI (Purchasing Managers" Index, USA)

We will consider in detail the structure and properties of business optimism indices using the example of the American Purchasing Managers Index (Index of business activity), NAPM. This is an indicator of business activity in the manufacturing sector of the US Institute of Supply Management. Until January 2002, it was called NAPM - after the name of the National Association purchasing managers (National Association of Purchasing Management).

The US National Association of Purchasing Managers releases an Index of Business Activity

Usually shortened to NAPM or PMI. The report presents the results of a survey of purchasing managers in the industrial sector (for services, which occupy about 40% of US GDP, a separate Index of business activity of the National Association of Service Managers is calculated - Index of business activity services index) and aims to study the influence of the economy on the formation of price space and provides high-quality information about business trends, in fact - this is for senior and middle management of the economy. This index is used to measure changes in new factory orders, industrial output, employment, as well as wholesale inventories and supplier speed.

The Index of business activity in the USA is calculated based on data from purchasing managers

Formal responses to survey participants' questions are limited to ratings of "higher" (more), "lower" (less) or "no change" compared to the previous month, and the respondent can also add their own comments. Each report component is compiled into a diffusion index, which is calculated as the sum of the simple percentage changes in the "above" and "below" values ​​plus one-half percentage of the "same" or "no change" responses. The diffusion index can fluctuate between 0 and 100% with different range characteristics: a value of 50% means no change; above 50% - improvement; and below 50% means decline. The indicator is measured in % ranging from 0 to 100%, depending on the values ​​of the components:

Weighting coefficients of purchasing managers' response categories in the Index of business activity

The resulting measure of business optimism is a composite diffuse index called the Purchasing Managers' Index (PMI), based on a weighted average of new orders, output, employment, lead times and inventories. Index of business activity indices are based on monthly research conducted among carefully selected companies.

To survey managers on the Index of business activity index, a careful selection of US companies is carried out

It provides early indicators of what is really happening in the private sector economy by tracking variables such as production, new orders, inventory levels, employment and prices in the industrial, construction and services sectors, as well as the . Index of business activity research is based on facts, not opinions, and is one of the earliest economic indicators released monthly. Data collection uses identical methods for all countries, allowing for international comparisons.

Comparison of graphs of Index of business activity index values ​​in different countries of the world

The main property of the index is a leading indicator of the business cycle. There are a number of main indicator levels for interpretation: cyclical high and cyclical low; 50% - level; 44% - level. If, after a period of growth, the PMI turns downward, this predicts a downward reversal in the business cycle. On the contrary, if after a fall the PMI, having reached a minimum, turns upward, then this is a sign of future recovery.

A fall in the Index of business activity below 50 predicts a recession on average over two months, and a fall below 44 always predicts an absolute decline in economic activity. The minimums reached by the Index of business activity in the stages of recession are on average 35, and after a reversal from the minimum, on average over 4 months it reached the level of 44, which always coincided with the minimum of the economic cycle. Overall, the Index of Business Activity reliably predicts turning points in growth cycles (that is, cyclical changes in the growth stages of an economy), but it is difficult to distinguish a growth cycle from the overall global economic cycle.

Chicago PMI (USA)

Index of business activity in the manufacturing industry according to the Chicago Association of Managers. The index is based on results from a survey of industrial purchasing managers in Chicago. The indicator reflects the situation in the segment of production orders, product prices and wholesale stocks in warehouses. If the indicator falls below 50 bp, this indicates a slowdown in the pace of development of the US economy; if the index is above the 50 bp level, this indicates an increase. The Chicago Index of Business Activity is closely watched by traders because it is released shortly before the release of the Institute's national business optimism index (ISM Index). Based on the dynamics of the employment component within the Chicago PMI index, in particular, one can judge the upcoming report on the labor market (). The indicator value is published by the Purchasing Managers Association of Chicago on the last business day of each month.

Chicago Fed Midwest Mfg Index (USA)

Midwest Manufacturing PMI. The index is based on results from a survey of industrial purchasing managers in Chicago. The indicator reflects the situation in the segment of production orders, product prices and inventories in warehouses, adjusted for the territorial factor. Compared to the overall index, the Chicago Index of business activity for the country as a whole has a modest impact on Kansas City Fed Mfg index chart, USA for 2011-2015.

NY Fed Empire State index (USA)

New York Fed Business Activity Index. The index is based on the results of a survey of top managers and is provided by the Federal. The indicator reflects the situation in the segment of production orders and business optimism in the business environment.

Richmond Fed Mfg Index (USA)

Richmond Fed Business Activity Index. The index is based on a survey of top executives and is provided by the Federal Reserve Bank of Richmond. Philadelphia Fed index chart, USA for 1968-2015.

Chicago Fed National Activity Index (USA)

Chicago Fed National Business Activity Index. The index reflects the level of psychological comfort and satisfaction of American consumers with the situation in the state's economy. The indicator consists of two main components: characteristics of current conditions (sentiment index) and characteristics of expectations (expectations index). At its core, the University of Michigan Consumer Sentiment Index is one of the key barometers of the US economy, and therefore has a very strong impact on the US currency.

ISM (Institute of Supply Managers, USA)

ISM (formerly called NAPM (National Association of Purchasing Managers)) comes from the Institute of Supply Managers, an association that publishes a monthly "Report on Business" that provides an integral view of the state of the industry, expressed in the so-called "diffusion index". The ISM index is the American analogue of the European and Russian PMI (Product Manufactoring Index), which is calculated by the agency.

What is the ISM Business Activity Index?

Purchasing Managers' Index for the US manufacturing sector, calculated by the Institute for Supply Management (ISM). Reflects the state of business activity in the country's manufacturing industry. The indicator is based on a survey of purchasing and supply managers of 400 companies from 20 industrial sectors in various regions of the country, is published once a month and is not subsequently revised. The equilibrium level for this indicator is 50 points - if the index is above 50 points, business activity is expanding in industry. The index consists of the following components: index of new orders, production, employment, shipments, supplier inventories, customer inventories, prices, unfilled orders, new export orders, imports.

The US Non-Manufacturing Purchasing Managers' Index, calculated by the Institute for Supply Management (ISM). Reflects the state of business activity in the service sector, which forms about 90% of GDP. The equilibrium level for this indicator is 50 points - if the index is above 50 points, business activity is expanding in the service sector. One of the most significant components of the ISM Non-Manufacturing index is the employment component - a leading indicator of the key report on the labor market Non-farm Payrolls.

PMI (Markit Economics, Germany)

These indices show the state of the economy of the European Union and Germany as a whole. If the indicator grows and exceeds 50, then we can further draw conclusions about the improvement in the economic development of the countries of the European Union as a whole. If the indicator decreases and is below 50 and continues to decline to the level of 40, this indicates that the situation of the economies of the European Union countries is deteriorating and is in a recession.

The PMI index is published by the analytical agency Markit Economics and evaluates business and development conditions in the German manufacturing sector. This sector forms a large part of the final GDP indicator, which makes the PMI an important economic indicator of business conditions and the overall health of the German economy.

Graph of the composite index Index of business activity in Germany for 2013-2015.

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