Is business getting better or worse?

Watch the needle cross 50.

Each month, purchasing managers at thousands of firms are asked one kind of question: **better, same or worse than last month?** Their answers become one number.

**50 is the line:** above it, business is expanding; below it, shrinking.

Two health checks

• Purchasing Managers' Index (PMI) a monthly survey — Purchasing managers report on new orders, output, jobs and expectations. Separate surveys cover **manufacturing** and **services**. Above 50 means expansion; below 50, contraction; 50, no change.
• Index of Industrial Production (IIP) actual factory output — Measures how much India's industries produce compared with a fixed base year. MoSPI releases it every month. Rising IIP is a good sign; falling IIP rings an alarm.

**Remember:** PMI is about direction (better or worse than last month). IIP measures the output itself.

Drag the PMI needle

Slide the reading.

Example readings.

Read the factory numbers

Tap each reading.

IIP growth compares this month's industrial output with the same month a year earlier.

**Remember:** a weak IIP can push the RBI towards **cutting** rates to help growth.

Example readings.

Check — Question 3 of 4

Classify each PMI reading.

What you now know

• The PMI is a monthly survey of purchasing managers in manufacturing and services.
• PMI above 50 means expansion, below 50 contraction, and exactly 50 no change.
• The IIP measures industrial output against a base year; MoSPI publishes it monthly.
• Rising IIP is good news for markets; falling IIP is a warning.
• A weak IIP can push the RBI towards cutting rates.