The Purchasing Managers' Index for the private services sector (PMI–Services) rose in November to 59.1 from 55.9 in October. This is the highest level since June 2022 and marks the third consecutive month that the index has been above its historical average (55.6).
– The recovery in the service sector has really picked up steam this fall. Lower interest rates and increased demand for consumption and investment have begun to have an impact on service companies and their business plans to an extent we haven’t seen since the first half of 2022, says Jörgen Kennemar, who is responsible for analyzing the Purchasing Managers’ Index.
Three out of four sub-indices in the Services PMI are above their historical averages. Business volume accounted for the largest positive contribution to the rise in the Services PMI, followed by delivery times and employment, while the new orders index retreated from a high level. Price inflationary pressure in the services sector continues to rise, as the index for raw material and input prices rose to 57.2 in November—the highest level in eight months—from 56.1 in October.
As with the manufacturing PMI, Sweden is in a significantly better position than many other countries and regions in terms of economic recovery.
Silf/Swedbank's PMI Composite Index is a weighted index of the Purchasing Managers' Indexes for the manufacturing and service sectors. The index rose to 57.8 in November, up from 55.6 in October. Business activity is increasing, and the index is in its third consecutive month of
above its historical average (55.1). The services sector, which had previously shown sluggish growth, has picked up momentum this fall and is now driving the Composite PMI, in which the services PMI carries the most weight (72 percent of the weighted index). The higher level of business activity is also reflected in the National Institute of Economic Research’s Business Cycle Barometer, which reached its highest level since July 2022 in November, driven by the construction and services sectors.
“The economic situation in the business sector improved significantly during the fourth quarter, but companies are still holding off on hiring new employees. This points to productivity-driven growth,” says Kennemar.
