PMI rose to 64.9 in December – strong finish to 2020
• The PMI rose in December to 64.9 from an upward revision of 59.8 in November. It is the largest monthly increase since last summer, strengthening what appears to be a broad recovery in Swedish manufacturing. This is a surprisingly strong outcome probably driven by growing global trade, but perhaps also increased optimism in connection with the start of coronavirus vaccinations, says Jörgen Kennemar, who is responsible for analysis of the PMI at Swedbank.
• All subindexes contributed to the rise in the PMI. Suppliers’ delivery times and employment together contributed 2.7 points, followed by production (1.0 points) and new orders (0.9 points). Inventories added 0.4 points. What is notable is that new hiring needs in manufacturing industry are again on the rise, at the same time that the index for delivery times reached a new high.
• Manufacturers’ production plans were more upbeat in December than in November and the index reached 67.6. This marks the second month in a row that the index exceeds the historical average (63.6).
• The index for prices of commodity and intermediate goods rose by no less than 13.7 points in December to 71.9 compared with November (58.2). Price pressure at the producer level is growing after a lengthy period of falling prices, and an increasing number of purchasing managers are now reporting rising commodity prices. This is another sign that the Swedish manufacturing sector is gaining momentum, 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 was conducted between December 10–21.
Next publication of the Purchasing Managers’ Index: Monday, 1 February 2021
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