PMI rose to 52.5 in February: Recovery from low level
• The PMI rose to 52.5 in February from 51.7 in January after having fallen two months in a row. It is positive that manufacturing activity strengthened in February, though from low levels. But at the same time production plans have become less optimistic, indicating increased uncertainty about growth prospects going forward, says Jörgen Kennemar, who is responsible for analysis of the PMI at Swedbank.
• The sub-index for new orders made the biggest positive contribution to the increase in the PMI, followed by production and inventories. The employment sub-index and suppliers’ delivery times fell, contributing negatively to the total index.
• The decrease in suppliers’ delivery times continues and in February they reached the lowest index level since 2015. Shorter delivery times indicate that demand pressure continued to ease, which also raises questions about the strength of Swedish manufacturing activity, says Jörgen Kennemar.
• Price pressure at the producer level continues to rapidly slow. In February the index for prices of commodity and intermediate goods fell to 48.8 from 49.0 in January. The weak krona and rising global commodity prices do not yet seem to have led to higher price pressure at the supplier level, notes 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: Monday, 1 April 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