PMI fell to 52.0 in December: Weak finish to 2018
• The PMI dropped in December to 52.0 from 55.4 in November, reaching the lowest level since the beginning of 2016. The December reading showed a broad decline and means that Swedish industrial activity lost momentum at the end of 2018, says Jörgen Kennemar, who is responsible for the analysis of the PMI at Swedbank. Monthly readings should be interpreted with caution, however, because of which the next months will be critical to where the economy is headed, Jörgen Kennemar notes.
• The biggest negative contribution to the decline in the PMI came from the production sub-index, followed by suppliers’ delivery times, new orders and employment. What is noteworthy are the declines in delivery times and new orders, which have fallen the most in the last twelve-month period.
• Corporate production plans were less optimistic in December and the index dropped to 63.4 from 66.7 in November, which nevertheless means a continued overweight of companies that expect to increase production in the next half-year.
• The decrease in the index for prices of commodity and intermediate goods was accentuated in December with a further drop of 8.1 points to 51.7. This result fits well with the global commodity price trend and indicates lower price pressure at the producer level, 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: Friday, 1 February 2019
Jörgen Kennemar, Swedbank Public Affairs, phone +4670- 643 83 29, email@example.com
Anna Sjöblom, Silf, phone +4673 – 518 70 11, firstname.lastname@example.org