Ivey Index

The Ivey Purchasing Managers Index (IPMI), also known as the Ivey PMI, is an economic indicator in Canada that reflects month-to-month changes in the dollar value of purchases as reported by a panel of purchasing managers across various sectors. Jointly sponsored by the Purchasing Management Association of Canada (PMAC)—now integrated into the Supply Chain Management Association (SCMA)—and the Richard Ivey School of Business at Western University, Ontario, the index serves as a key measure of economic activity in Canada.

Overview

The Ivey PMI is derived from survey responses from purchasing managers across multiple industries in Canada, capturing fluctuations in five main areas of activity: purchases, employment, inventories, supplier deliveries, and prices. Each month, the managers indicate whether activity in these categories has increased, decreased, or remained stable relative to the previous month.

The responses are compiled into an index where a reading above 50 points indicates an expansion in economic activity, and a reading below 50 suggests contraction. This format aligns the IPMI with other globally recognized PMIs, including the ISM Manufacturing PMI in the United States, making it an effective tool for anticipating economic trends.

Methodology

The IPMI’s methodology includes seasonal adjustments to minimize the impact of regular economic cycles, providing a clearer view of actual changes in purchasing activity. These adjustments enhance its reliability as an economic barometer, sensitive to changes in supply chain dynamics and market demand shifts. The Ivey PMI is published monthly, with additional special reports issued during significant economic fluctuations, such as recessions or rapid expansions.

Applications

The Ivey PMI serves various stakeholders, including businesses, investors, and policymakers:

Businesses utilize the index to assess supply and demand trends, aiding in production planning and inventory control.
Investors use the IPMI as a leading economic indicator to inform investment strategies.
Government and policymakers monitor the index as an indicator of economic health, using its insights to guide decisions on employment, inflation, and interest rate policies.

History

Since its inception, the Ivey PMI has evolved to cover a broader range of economic activities. The Richard Ivey School of Business has remained an essential partner in the IPMI's development, ensuring its academic rigor and credibility. Over time, the index has become a trusted measure of Canada’s economic climate, frequently referenced in economic forecasts and policy discussions.

References

Ivey Business School. "Ivey Purchasing Managers Index (PMI)." Ivey Business School. Ivey Purchasing Managers Index. Retrieved 29 October 2024.
Supply Chain Management Association (SCMA). "History of PMAC and the Ivey PMI." SCMA. Retrieved 29 October 2024.
Investopedia. "Purchasing Managers' Index (PMI)." Investopedia. 29 October 2024.

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