Services PMI rose to 54.1 in August: Increase but from low level
• The purchasing managers’ index for the private service sector (Services PMI) rose in August to 54.1 and reached the highest level since March of this year. The upturn came in large part through an increase in new orders, which we know can show large monthly fluctuations, because of which the August outcome shouldn’t be over-interpreted, says Jörgen Kennemar, who is responsible for PMI analysis at Swedbank.
• The subindex for new orders rebounded in August after weak outcomes in June and July and was the biggest contributor to the rise in the Services PMI, followed by the employment subindex. The subindex for business volumes, on the other hand, stood still, while the slide for suppliers’ delivery times continued for the fifth consecutive month, suggesting a continued decline in demand pressure in the service sector.
• The index for intermediate goods prices at the supplier level rose to 54.3 in August from 52.7 in July. Service companies’ business plans remain aggressive but have been gradually adjusted downward in pace with weaker global conditions and reached 60.3 in August.
• Silf/Swedbank’s PMI Composite index was 53.6 in August from an upward revision of 52.4 in July, driven by the service sector. This marks the second month in a row that business activity rose in the third quarter, but from a low level. While this is a positive economic signal, the downside risks remained high, 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: Thursday, 3 October 2019
Jörgen Kennemar, Swedbank Public Affairs, tfn +4670 – 643 83 29, email@example.com
Anna Sjöblom, Silf, tfn +4673 – 518 70 11, firstname.lastname@example.org