PMI dropped to 45.4 in November: Manufacturing continues to slide
• The PMI fell in November to 45.4 from 46.0 in October. Manufacturing activity continued to decline for the third consecutive month to levels we have not seen since 2012, and there are no clear signs yet of a turnaround even though production plans were a positive economic signal in November, says Jörgen Kennemar, who is responsible for analysis of the PMI at Swedbank.
• New orders and employment together contributed 1.1 points to the decrease in the PMI, while the subindexes for production, delivery times and inventories produced a positive contribution of 0.5 points. The fact that all the subindexes excluding inventories are below the 50 mark for the third month in a row indicates weak activity in manufacturing industry.
• The index for manufacturers’ production plans rose in November to 52.7, but is below the average for the year. The slowdown in new orders increases the risk that production plans may be revised even lower in the months to come.
• The index for prices of commodity and intermediate goods fell to 41.0 in November from 43.4 in October. This is the lowest level since February 2016 and shows that the weak price pressure is widespread in manufacturing industry, which could eventually be a constraint on Swedish inflation, 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 the Purchasing Managers’ Index: Thursday, 2 January 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