PMI rose to 58.2 in October: Manufacturing proves resilient to coronavirus surge
• The PMI continues to rise, reaching 58.2 in October after an upward revision of 55.9 in September. This is the second month in a row that the index is higher than the historical average, suggesting a robust recovery. The increase in Covid-19 cases has not yet affected Swedish manufacturing activity or corporate production plans, but the downside risks have risen significantly, says Jörgen Kennemar, who is responsible for analysis of the PMI at Swedbank.
• Four of five subindexes contributed to the increase in the PMI with new orders, delivery times and production all passing the 60-level for the first time since 2017. Delivery times reached the highest index level since April but also raises questions whether the coronavirus surge and introduction of new restrictions will lead to new delivery disruptions for Swedish industry, says Jörgen Kennemar.
• Manufacturing industry’s production plans for the next six months are more upbeat. In October the index reached 62.0 compared with 59.5 in September, levels that have not been reported since before the coronavirus pandemic.
• The index for prices of commodity and intermediate goods rose in October to 55.5 from an upward revision of 50.2 in September. This means that the extended period of falling intermediate goods prices at the supplier level has come to an end.
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 October was conducted between October 10–27.
Next publication of the Purchasing Managers’ Index: Tuesday, 1 December 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