The APICS Business Outlook Index refers to a numeric measurement that assesses the economic and business conditions of the manufacturing sector in the United States. Developed by APICS, the Association for Supply Chain Management, this index aims to provide insights into the overall health and growth prospects of the industry.
The index is calculated by surveying a panel of supply chain professionals, including purchasing and supply management executives, who are members of APICS. This panel is asked to provide their expectations for the upcoming six-month period regarding various factors affecting the manufacturing sector, such as production level, new orders, employment, supplier deliveries, and inventory levels.
Based on the responses received, the APICS Business Outlook Index is then computed using a diffusion index methodology. This means that the index is scaled on a range of 0 to 100, with a reading above 50 signifying expansion or positive growth in the sector, while a reading below 50 indicates contraction or negative growth.
The APICS Business Outlook Index serves as an important leading indicator for the manufacturing industry, providing valuable information to businesses, analysts, policymakers, and economists. It helps in forecasting trends, making informed business decisions, and evaluating the overall state of the economy. By tracking changes in the index over time, stakeholders can gain insights into the short-term economic prospects and adjust their strategies accordingly.
