Services PMI fell to 49.5 in October: Cooler service sector
• The purchasing managers’ index for the private service sector (Services PMI) dropped in October to 49.5 from 49.8 in September, which is a smaller decline than the previous month. That the Services PMI is below the 50 mark for the second month in a row indicates a slowing service sector. It is also beginning to impact employment, which noted the biggest decrease in October, says Jörgen Kennemar, who is responsible for PMI analysis at Swedbank.
• The subindex for employment fell to a six-year low in October and was the biggest reason for the decline in the Services PMI, although individual monthly outcomes should be interpreted with caution. The subindexes for new orders and business volumes recovered in October after the big drop in September, while delivery times continued to fall.
• Service companies’ business plans have to still be considered expansionary with a reading of 60.3 in October. It is positive that an overweight of service companies are planning to increase their business volumes in the near term, but there is a risk that their plans are too optimistic due to the weaker orders, notes Jörgen Kennemar.
• Silf/Swedbank’s PMI Composite index fell to 48.6 in October from 48.8 in September, confirming that activity in the private sector has slowed. Since October 2018 the total index has fallen 7.5 points.
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, 4 December 2019
Jörgen Kennemar, Swedbank Public Affairs, tfn +4670 – 643 83 29, firstname.lastname@example.org
Anna Sjöblom, Silf, tfn +4673 – 518 70 11, email@example.com