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Value-Added Monthly Index (Vami)

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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.

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