Value Added Monthly Index (VAMI)

The Value Added Monthly Index (VAMI) is a seasonally adjusted index that measures the growth in value added by the manufacturing sector in a particular country. It is a key indicator of economic activity and is often used to gauge the strength of the manufacturing sector’s contribution to GDP growth.

Formula:

VAMI = (VA/VAM-1) x 100

where:

• VA is the value added in the manufacturing sector in the current month
• VAM is the value added in the manufacturing sector in the same month of the previous year

Key Components:

• Manufacturing output: Includes the value of goods produced in the manufacturing sector, measured in dollars or a specific currency.
• Materials: Includes the cost of materials used in the production of goods, such as raw materials, components, and energy.
• Intermediate consumption: Includes the value of goods that are used as inputs in the production of other goods.
• Exports: Includes the value of goods exported to other countries.
• Imports: Includes the value of goods imported from other countries.

Interpretation:

• VAMI values above 100 indicate growth in value added in the manufacturing sector, while values below 100 indicate decline.
• The VAMI can be used to track the overall health of the manufacturing sector and the economy.
• Changes in the VAMI can be used to forecast future economic growth and to gauge the impact of economic policies.

Examples:

• If the value added in the manufacturing sector in January is $10,000 and the value added in January of the previous year was $8,000, the VAMI would be 125.
• If the value added in the manufacturing sector in February is $10,500, the VAMI would be 131.

Additional Notes:

• The VAMI is usually published by national statistics agencies.
• The VAMI is typically released with a delay of a few months.
• The VAMI is a key indicator of manufacturing sector performance and is often used in conjunction with other economic indicators to provide a more complete picture of the overall economy.