Services PMI fell to 55.4 in August: Still high despite decline
- The purchasing managers’ index for the service sector (Services PMI) dropped to a still high 55.4 in August from 58.9 in July. The decline was broad with negative contributions from all sub-indices. New orders, which posted the biggest negative contribution, explains half the slowdown in the Services PMI, while employment and business volumes explain about 40 percent. The common denominator for these three sub-indices was that they all reached new lows for the year.
- The sub-index for business volumes dropped from 60.1 to 57.2 in August, corresponding to a negative contribution of 0.7 points to the Services PMI. The index for planned business volumes fell by 3.6 points to 63.7 in August.
- The sub-index for new orders dropped to 54.3 in August from 59.2 in July. The index for order backlogs dropped to 48.7, which means that they shrunk. The last time order backlogs shrunk, i.e., had a reading below 50.0, was in April 2016.
- The index for prices of suppliers’ intermediate goods rose to 62.8 in August from 60.2 in July. A three-month moving average signals that the short-term trend in price increases has more or less been stable since the end of last year.
The Purchasing Managers’ Index (PMI) is a business cycle indicator for the Swedish economy produced by Swedbank in cooperation with Silf. The PMI is produced for both the manufacturing and service sectors. The aim of the PMI is to get a quick measure of the current state of the economy. Each month purchasing managers are surveyed and an index calculated. An index level above 50 indicates expansion, while a level below 50 signals a contraction. The PMI for the manufacturing sector is published on the first banking day of each month at 8:30 am (CET), while the corresponding index for the service sector is published on the third banking day of each month at 8:30 am (CET).
Next publication of Purchasing Managers’ Index – Services: Wednesday, 4 October 2017
For more information please contact: Cathrine Danin, Swedbank Makro, phone 08 – 700 92 97, firstname.lastname@example.org or Anna Sjöblom, Silf, phone 073 – 518 70 11, email@example.com