PMI rose to 39.2 in May – Economic slowdown eases
• The PMI rose to 39.2 in May from 36.4 in April after having fallen by a total of 16.5 points in March and April. This means that the downturn in Swedish manufacturing industry has slowed. While it is still too early to say whether a bottom has been passed, the likelihood of a recovery has increased now that more countries have begun to ease the restrictions introduced in the wake of the coronavirus pandemic, says Jörgen Kennemar, who is responsible for analysis of the PMI at Swedbank.
• The subindexes for production and new orders saw the biggest increases in May, but from historically low levels, together contributing 3.8 points to the PMI. The drop in employment also tapered off during the month, while delivery times, which have risen significantly this spring, fell in May and lowered the total index by 1.3 points.
• Manufacturers’ production plans for the next six months were less pessimistic in May and the index rose to 37.8 from a record-low 22.9 in April. This is a marked improvement and positive economic signal compared with the bottom reached in April, but an overweight of companies still expect production cuts, says Jörgen Kennemar.
• Price pressure at the producer level fell in May compared with April and the index registered 40.2. On the annual basis the index was down 10.3 points, supporting continued weak price pressure in the supply chain.
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 May was conducted between May 11–25.
Next publication of the Purchasing Managers’ Index: Wednesday, 1 July 2020
Jörgen Kennemar, Swedbank Public Affairs, tfn +4670- 643 83 29, firstname.lastname@example.org
Anna Sjöblom, Silf, tfn +4673 – 518 70 11, ansj@silf