Services PMI dropped to 56.4 in December: Broad decline but still in the growth zone
• The purchasing managers’ index for the service sector (Services PMI) fell to 56.4 in December from 61.1 in November and reached the second lowest level in 2018. It was a broad decline and a clear reversal after November’s strong numbers, says Jörgen Kennemar, who is responsible for PMI analysis at Swedbank.
• The sub-indexes for new orders and business volumes saw the biggest decreases in December, lowering the Services PMI by just over two points each. The sub-index for employment dropped to 56.6, the lowest level since May 2018, indicating less widespread hiring needs in the service sector.
• Service companies’ business volume plans remain optimistic, however, and the index registered 67.6 (67.7 in November). Prices of suppliers’ intermediate goods fell for the third consecutive month in December to 61.1, signaling lower price pressure.
• Silf/Swedbank’s PMI-Composite index of the purchasing managers’ indexes for manufacturing and the service sector, dropped in December to 55.1 from 59.5 in November. The December reading was the lowest since 2016, adding to the impression that the Swedish economy lost momentum in the final months of 2018, in line with the trend in many other European countries, says Jörgen Kennemar.
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 and PMI Composite: Tuesday, 5 February 2019
Jörgen Kennemar, Swedbank Public Affairs, phone +4670 – 643 83 29, firstname.lastname@example.org
Anna Sjöblom, Silf, tfn +4673 – 518 70 11, email@example.com