celebrate their 20th birthday in the UK this year. In 1991, the Institute of Purchasing & Supply (pre-chartered status) and research company NTC began a collaboration to raise the profile of the purchasing profession in the UK and to produce better economic data for business and policy decision makers.
Data collection for a UK manufacturing PMI survey began in mid-1991. By 1994, the accuracy and speed of publication of the UK manufacturing PMI was attracting the attention of the media as well as the financial markets, the Bank of England and HM Treasury. The success of the survey encouraged NTC to extend coverage to the services economy. Measuring the output of hairdressing, restaurants and banks in one survey was a challenge, but after a year of trials, a UK Services PMI was launched in 1996.
With the addition of a construction survey in 1997, many analysts and economists now cite the PMIs as better indicators of what’s happening in the business world than official economic data. PMI surveys are now conducted in 26 countries, including all major developed and emerging nations. Most are compiled by Markit, which now produces the UK PMIs following the acquisition of NTC.
Contributors to the PMI surveys have privileged access to these survey results. In return for completing a brief questionnaire, which asks for the direction of change in a number of variables, participants not only help guide economic policy, but also have access to information that can make a real difference to business planning and decision making. Purchasing managers use the PMIs to gauge price trends, while indicators of supplier delivery times are used to anticipate moves from a buyers’ to a sellers’ markets and – alongside price data – can be used in negotiations and as benchmarking tools.
Twenty years on, we are learning new ways to use the data for policymakers and the business community. We hope that the next 20 years will build on the success of the surveys and bring further benefits, whether it be helping the Bank of England to set interest rates or helping a purchasing manager negotiate a fair deal.
If you would like to become a contributor to the PMIs, please contact firstname.lastname@example.org
. For information on how to use the PMIs in your business visit www.markiteconomics.com/Survey/Page.mvc/home
* Chris Williamson is chief economist at Markit