Services PMI rose to 52.5 in January: Back to the growth zone
• The purchasing managers’ index for the private service sector (Services PMI) increased in January by 3.4 points to 52.5 compared with December, putting it back in the growth zone. While the Services PMI is still lower than normal, the downward trend has been broken and a weak recovery has begun in recent months. The risk of a setback remains high, however, says Jörgen Kennemar, who is responsible for PMI analysis at Swedbank.
• All subindexes in the Services PMI rose in January. New orders were the biggest contributor to the increase in the Services PMI at 1.8 points, followed by employment (0.7 points) and delivery times (0.6 points), while the contribution from business volumes was limited to 0.3 points.
• Service companies’ hiring needs have begun to increase again. In January the employment subindex reached its highest level since June 2019. Service companies’ business plans fell in January for the second month in a row to 60.3.
• Silf/Swedbank’s PMI Composite index rose to 52.2 in January compared with 48.7 in December. This is the first time since August that the PMI Composite is in the growth zone. It is still too early to determine whether this is a sign an economic turning point. The three-month moving average is more indicative of a stabilization than a strengthening of business activity, 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, 4 March 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