A diffusion index measures breadth, not magnitude. A reading of 55 tells you more firms are growing than shrinking; it says nothing about by how much. That is why an index can sit at 52 during a period of very weak growth.
Two practical consequences follow. The direction and the distance from 50 matter more than the level, and a diffusion index cannot be mapped mechanically onto a GDP growth rate, though people try. Most PMI surveys, several regional Fed surveys and the payroll diffusion index share the construction.
Example: 40% of firms report higher output, 25% report lower and 35% report no change. The index is 40 + (0.5 x 35) = 57.5, a broad-based expansion even if each firm's increase was trivial.
Related: pmi, ism-manufacturing-pmi, sp-global-pmi, ism-services-pmi, leading-indicator