PMI rose to 55.3 in September: Robust recovery
• The PMI increased for the fifth consecutive month and registered 55.3 in September from an upward revision of 53.8 in August. The recovery in manufacturing industry is continuing and the index is now, for the first time since autumn 2018, above the historical average (54.3). Robust new orders and increased production are driving the upturn, but manufacturers are still hesitant to hire, says Jörgen Kennemar, who is responsible for analysis of the PMI at Swedbank.
• The production and new orders subindexes saw the largest monthly gains and in September reached their highest levels since early 2018. Taken together, they contributed 1.8 points to the rise in the PMI. The subindex for employment fell and remains outside the growth zone, while delivery times increased slightly.
• Manufacturing industry’s production plans still signal an expansion even though the index fell slightly in September to 59.1. It is positive that the majority of manufacturing companies expect to raise production in the next six months, but an increased spread of the coronavirus could create greater uncertainty about future growth prospects. The coming months will be critical, says Jörgen Kennemar.
• The index for prices of commodity and intermediate goods rose in September for the fourth month to 48.9. It is still far below the historical average (56.7), indicating continued weak price pressure at the producer level.
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 September was conducted between September 10–25.
Next publication of the Purchasing Managers’ Index: Monday, 2 November 2020
Jörgen Kennemar, Swedbank Public Affairs, tfn +4670- 643 83 29, email@example.com
Anna Sjöblom, Silf, tfn +4673 – 518 70 11, firstname.lastname@example.org