PMI rose to 53.4 in August: Manufacturing shifts up a gear
• The PMI registered 53.4 in August from an upward revision of 51.4 in July. This is the second consecutive month that the PMI is in the growth zone and it is now at the highest level since the fourth quarter of 2018. While last spring’s PMI decline has been recovered, it does not mean that manufacturing industry is back to pre-pandemic production levels, says Jörgen Kennemar, who is responsible for analysis of the PMI at Swedbank. This would require a longer period in the growth zone than two months.
• All subindexes contributed to the increase in the PMI. The subindex for new orders saw the largest monthly gain in August and contributed 1.1 points to the PMI, followed by employment and delivery times at 0.3 points each. The contribution from production was limited to 0.1 point.
• Manufacturing industry’s production plans were more upbeat in August than in July and the index rose to 62.1, the highest level in just over a year. This may be a sign of greater optimism about the economy.
• The index for prices of commodity and intermediate goods is signaling continued weak price pressure at the producer level despite rising in August to 48.3 from 44.0 in July. This marks the fifteenth month in a row that the index is below the 50 mark, the longest consecutive period in the history of the index. Low resource utilization and a stronger krona tend to reduce price pressure in the near term, 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 July was conducted between August 10–27.
Next publication of the Purchasing Managers’ Index: Thursday, 1 October 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