Q: What types of economic reports does Ai Group produce?
A: Australian PMI®
Produced by Ai Group in conjunction with PricewaterhouseCoopers, the Australian PMI® is the most up-to-date snapshot of current domestic manufacturing conditions. Produced monthly, the PMI® is a diffusion index based on production, new orders, employment, finished stocks and deliveries of raw materials.
Australian PSI®
Produced by Ai Group in conjunction with the Commonwealth Bank, the Australian PSI® is the most up-to-date snapshot of conditions in the service sector. Like the Australian PMI®, the Australian PSI® is a diffusion index based on sales, new orders, employment, finished stocks, and supplier deliveries.
Australian PCI®
Produced by Australian Industry Group in conjunction with the Housing Industry Association Australian, Performance of Construction Index (Australian PCI®) is a national composite index based on the diffusion indexes for activity, orders/new business, deliveries and employment with varying weights.
Australian Industry Group-Deloitte National CEO Survey
Produced by Ai Group, in conjunction with Deloitte Touche Tohmatsu, the quarterly Australian Industry Group-Deloitte National CEO Survey series presents the views of business leaders in the manufacturing, services and construction sectors on major economic and policy issues.
Q: How is the data gathered?
A: Ai Group sends out a survey questionnaire to its members on a monthly basis that covers a range of issues including changes in sales levels, wages, prices and business costs. Each of Ai Group's three performance indices is based on the responses of a representative sample of approximately 200 businesses.
Q: What does "PMI®" stand for?
A: The PMI® stands for Performance of Manufacturing Index.
Q: How is the PMI® calculated, and what does it mean?
A: The PMI® is compiled through monthly surveys sent to an average of approximately 700 businesses, conducted on a representative sample basis for the manufacturing sector. Each month senior representatives from businesses across Australia (usually chief executive officers or chief financial officers) are asked a series of questions regarding the actual performance of their business over the previous month with respect to a number of components that include production, new orders, employment, sales, supplier deliveries and inventories.
Respondents are asked to report changes against the previous month in terms of qualitative responses (e.g. whether sales increased, decreased or did not change at all). Three possible answers result (with flexibility as to the degree of change): it has increased, it has not changed, or it has decreased.
From this information a composite 'diffusion index' is calculated. A diffusion index indicates the degree to which an indicated change, such as through survey responses, is dispersed throughout the sample population. The PMI is a composite diffusion index of five components (with weights in parentheses): production (25%), new orders (30%), employment (20%), stocks (10%) and deliveries (15%). The diffusion index of each of these five components, say production, is in turn derived from the weighted sum of businesses' responses to production activity across all sub-sectors in manufacturing, where the weights are the gross value added output of each sub-sector in manufacturing.
Q: What is a diffusion index?
A: The Australian Performance of Manufacturing Index (PMI®), Performance of Services Index (PSI®) and Performance of Construction Index (PCI®) compiled by the Ai Group are "diffusion indexes" and they serve as indicators of month-to-month changes in activities in the respective sectors of the economy. In practice, month-to-month refers to the preceding calendar month, i.e., if respondents received the questionnaire on the 12th of July, the responses would cover the month of June.
In the context of the Ai Group's performance indexes, a diffusion index indicates the extent to which an indicated change in activity is dispersed or diffused throughout the businesses considered in the sample of surveyed businesses.
Each diffusion index is derived by calculating the percentage of respondents who reported that activity has increased ("up") and adding it to one-half of the percentage that report the activity has not changed ("no change"). Using half of the "no change" percentage effectively measures the bias toward a positive or negative index. As an example of calculating a diffusion index, if the response is 20% "up", 70% "no change" and 10% "down", the diffusion index will be 55% (20% + [0.50 x 70%]). A diffusion index 50% indicates "no change" from the previous month.
The distance between the level that indicates "no change" (50%) and the actual measured level is important and interpreted as the extent of change. An index value of 60% indicates a larger increase than an index value of 55% (increased activity is recorded in more businesses), and an index value of 35% indicates a larger extent of decrease than an index value of 40% (decreased activity is recorded in more businesses). A diffusion index of 100% indicates all respondents reported increased activity, while an index level of 0% indicates that all respondents reported decreased activity.
Q: Do either of the Indicator Reports break down the information provided by specific State or industry?
A: The monthly PMI®, PSI® and PCI® reports include information on the level of activity in each of the sub-sectors in the manufacturing, services and construction sectors. The reports also contain information on the level of activity in each of the states.
Q: Where can I find historical information?
A: The time series data for each monthly value of the indices, ie the Australian PMI®, PSI® and PCI® can be licensed to interested research and economic service providers for an annual fee that entitles the user to reproduce and modify the data for their own economic products provided Ai Group's ownership in the Indices and the registered trademarks and the intellectual property rights of the relevant Index sponsor, are appropriately acknowledged and protected by the user.
A licence agreement is available for you to download here and information on the associated annual fee is available by contacting Phillip Chindamo at: phillip.chindamo@aigroup.asn.au.
Q: When are the indexes seasonally adjusted? Which indexes are seasonally adjusted?
A: Ai Group's Economics and Research Unit conducts a seasonal adjustment process for each of its performances indices (the Australian PMI®, PSI® and PCI®). Ai Group's three performance indices are constructed by applying weights to diffusion indices for four of the key survey indicators – production/sales/activity, employment, new orders and supplier deliveries (components). Seasonal adjustment factors are then applied to each of these components. A final composite index is then constructed from these seasonally adjusted components. More information is available here.
Q: Are there regional Reports On Business?
A: The Ai Group does not produce a regular report on businesses in regional areas. Nonetheless the
Ai Group have occasionally done so and these reports can be found here.
Q: Are there international reports equivalent to the Ai Group Indicator Reports?
A: Yes, there are international reports and information on these can be found at:
http://www.ntc-research.com/ and also at: http://www.ism.ws/ISMReport.
Q: Is the Ai Group Indicator report a month-to-month indicator, or month-to-year?
A: Ai Group's three performance indices are month-to-month indicators. Businesses are asked specifically about how trading conditions have changed over the past month.
Q: When are Ai group Reports released, and where are copies of the release available?
A: The release date for the:
Australian PMI® is the first working day of the relevant month
Australian PSI® is the third working day of the relevant month
Australian PCI® is the fifth working day of the relevant month.
Copies of the above reports can be downloaded here.
Policy and Representation
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The Australian Industry Group.