| Criteria | PMI | IIP |
|---|
| Full Form | Purchasing Managers' Index | Index of Industrial Production |
| Definition | Measures the health of the | Measures the growth rate of the industrial sector |
| manufacturing sector | |
| | |
| Calculation | Based on surveys of purchasing | Based on physical quantities of goods produced |
| managers in the manufacturing | in the industrial sector |
| sector | |
| | |
| Components | Comprised of sub-indices for | Based on the physical output of the industrial |
| new orders, production, | sector, broken down into three sectors: mining, |
| employment, supplier deliveries | manufacturing, and electricity |
| and inventories | |
| | |
| Focus | Focuses on the manufacturing | Focuses on the industrial sector |
| sector only | |
| | |
| Significance | Indicates overall economic | Indicates the growth rate of the industrial sector |
| activity and forecasts future | |
| trends in the manufacturing | |
| sector | |
| | |
| Uses | Used by investors, analysts, | Used by policymakers, economists, and investors |
| and policymakers to make | to monitor and evaluate the performance of the |
| investment and policy decisions | industrial sector and overall economic activity |
In summary, PMI measures the health of the manufacturing sector based on surveys of purchasing managers, while IIP measures the growth rate of the industrial sector based on the physical output of goods produced. PMI is a composite index of sub-indices for new orders, production, employment, supplier deliveries, and inventories, while IIP is broken down into three sectors: mining, manufacturing, and electricity. PMI is used by investors, analysts, and policymakers to make investment and policy decisions, while IIP is used by policymakers, economists, and investors to monitor and evaluate the performance of the industrial sector and overall economic activity.
