APICS Business Outlook Index

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Definition: APICS Business Outlook Index

Apics Business Outlook Index is a business index which is used to measure the expansion or contraction of the business. In particular, it is used in the manufacturing sector. Apics Business Outlook Index is the national manufacturing index which is formulated and calculated with a survey taken from the manufacturing firms.

APICS used to stand for American Production and Inventory Control Societ.y previously, but now it is just known as Apics. The index is calculated by the Educational Society for Resource Management on a monthly basis. It is generally released on the last Wednesday, Thursday or Friday of the month (depending on whichever is latest). The time for its release is fixed at 830 am and is strictly followed.

The index has a threshold value of 50. This indicates that: if the Apics Business Outlook Index is greater than 50, the manufacturing sector is in the expansion phase, which in turn, points towards the growth of the overall economy. And, if the value of the Apics Business Outlook Index falls below 50, it indicates a contraction of the sector. The index changes very rarely, and thus does not impact the markets much. It is used to predict another index: Purchasing Managers’ Index (PMI), which is released a few days after the Apics Business Outlook Index. PMI, is an important index for the market as its value moves the markets frequently.

Example: Apics Business Outlook Index value is 67: this means that the manufacturing sector is expanding and thus the economy would also grow. But say if the value falls down to 42, then one would infer that the sector is experiencing a contraction and decrease in its growth.



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