Services PMI rose to 49.2 in June: Big jump after the spring swoon
• The purchasing managers’ index for the private service sector (Services PMI) registered 49.2 in June after an upward revision to 41.6 in May. Since bottoming out in April, the index has risen 9.5 points, indicating that the slump in the service sector has come to an end. The rapid recovery is partly a rebound after the severe downtown this spring but is also getting support from the easing of coronavirus restrictions, says Jörgen Kennemar, who is responsible for PMI analysis at Swedbank.
• The subindex for new orders was the biggest monthly contributor to the increase in the Services PMI (5.6 points), followed by production (4.4 points), while the index for employment rose marginally but is still signaling lower employment. The subindex for suppliers’ delivery times fell in June, dropping the Services PMI by 2.7 points, probably due to fewer supply challenges.
• Service companies’ business plans were more optimistic in June. It is the first time in four months that the index is back in the growth zone (53.8), which is a positive economic signal.
• Silf/Swedbank’s PMI Composite index rose to 48.7 in June from an upward revision to 41.1 in May. While we shouldn’t read too much into a single monthly increase, the downward trend has been broken and the coming months will be a test whether the recovery in the private sector is continuing, 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). The survey for the Services PMI was conducted between June 8–25.
Next publication of Purchasing Managers’ Index – Services and PMI Composite: Wednesday, 5 August 2020
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