Not really, no

As dull as it sounds, the monthly manufacturing Purchasing Managers’ Index (PMI) has become one of the most closely watched business surveys in the world, and with good reason.

It relies on hard data from senior executives on the front line of production,

It’s a survey, of those executives. Yes, effort goes into making them think about the real numbers when they answer but it isn’t hard data.

It’s very useful, highly predictive of the real numbers which come out later and so on and on. But it still ain’t hard data.

8 thoughts on “Not really, no”

  1. Something I’ve never really understood is what is in it for the companies to be involved with these sort of surveys. Do they get paid for their time? Why would a busy company allow their employees time to send commercially sensitive information to random people for publication, even if anonymously? I get surveys from Defra about my farm, they get filed in the bin. If they want my time they can pay for it, otherwise on your bike. Why would Google or Amazon be any different?

  2. Jim, given that it involves purchasing managers – those people we used to call buyers – the “work”, such as it is, probably involves a lunch

  3. “given that it involves purchasing managers – those people we used to call buyers – the “work”, such as it is, probably involves a lunch”

    But why does the employer allow it? If I was employing a buyer I’d want them working on my business, not shmoozing with survey companies for no benefit to me.

  4. Jim, it’s not exactly a time consuming business to respond to the survey and you would expect the buyer to have the data at their fingertips:

    The data for the index are collected through a survey of 400 purchasing managers in the manufacturing sector on five different fields, namely, new orders from customers, speed of supplier deliveries, inventories, order backlogs and employment level.

    You don’t even have to report numbers: it’s qualitative – are orders for next month up or down on last month etc? You could probably automate it and send out the report at the push of a button

  5. “You don’t even have to report numbers: it’s qualitative – are orders for next month up or down on last month etc? You could probably automate it and send out the report at the push of a button”

    I repeat, whats in it for the company to be a part of this? Is that information not commercially sensitive? Why do they hand it over for someone else to make money out of?

  6. Bloke in North Dorset

    Jim,

    Hopefully right thread this time!

    They get to know whether what they are seeing in their own company is representative of their sector and the economy as a whole.

    Whether that information is worth the cost is another matter.

  7. Perhaps more important is that it is a first derivative ‘better or worse?’dispersion type survey that is almost universally misused to imply that any reading less than 50% is a recession…

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