Page 34 - FIPI - Policy & Economic Report May 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Sub-Indices Response as Response as Response as Diffusion S&P - Weighted
New orders Index Weightage score
“Increase” “No change” “Decline” 71.43
71.43 30% 21.43
200 100 50 71.43
71.43
Output 200 100 50 25% 17.86
71.43
Employment 200 100 50 20% 14.29

Suppliers’ 200 100 50 15%
200 100 50 10%
Delivery Time 100% 10.71
7.14
Stocks of 71.43

Purchase

Manufacturing

PMI

This indicates a strong expansion (PMI> 50) in the manufacturing sector month-over-month, driven by the
fact that the majority of the 350 surveyed executives (200 of them) are experiencing an improvement in
business conditions.

Scenario B- Considering each of the five sub-indices have its own breakdown of responses from the 350
managers surveyed. Since the response for “increase”, “decrease” and “no change” is different across all
5 sub-indices, the diffusion index computed would be different in all the cases as shown below: -

Sub-Indices Response as Response as Response as Diffusion S&P - Weighted
New orders “Increase” “No change” “Decline” Index Weightage score
Output 57.86 *
Employment 150 105 95 30% 17.36
42.00
70 154 126 25% 10.50
44.29 8.86
50 210 90 20%

Suppliers’ 30 245 75 43.57 15% 6.54
Delivery Time 10% 5.29
100% 48.53
Stocks of 150 70 130 52.86

Purchase

Manufacturing

PMI

*Calculation for Diffusion index= ((150/350*1) +(105/350*0.5)) *100 = 57.86

Here, as the final Manufacturing PMI is well below the critical threshold of 50, it shows contraction in the
manufacturing sector.

May 2026 Page | 33