Services PMI rose to 48.7 in December: Recovery from low level
• The purchasing managers’ index for the private service sector (Services PMI) reached 48.7 in December, compared with 47.9 in November. It is the first time since August that the index rose. While four months in a row outside the growth zone shows that service activity continues to be weak, there are bright spots, not least in companies’ business plans, which remain expansionary even though the risks on the downside are high, says Jörgen Kennemar, who is responsible for PMI analysis at Swedbank.
• The subindex for employment was the biggest contributor to increase in the Services PMI in December at 0.4 points, followed by new orders (0.3 points) and business volumes (0.2 points), while delivery times had a negative contribution (0.1 point) for the fifth consecutive month.
• Service companies’ business plans were surprisingly stable in the fourth quarter in spite of weaker new orders and global economic uncertainty. Although the index retreated in December to 61.9, a majority of service providers still plan to increase business volumes in the next half-year.
• Silf/Swedbank’s PMI Composite index rose to 48.3 in December from 47.3 in November. A recovery but still outside the growth zone. The outcome indicates continued weakness in the private sector, which will probably be reflected in the GDP numbers going forward, 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: Wednesday, 5 February 2020
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