The Purchasing Managers' Index (PMI) for Swedish manufacturing rose in September to 58.1 from 56.3 in August, reaching its highest level in three months. The index thus remains above its historical average (54.3) for the fifteenth consecutive month.
– The September results show a clear strengthening in Swedish industry, supported by a brighter global economic outlook. Order intake rose across the board, and production and order backlogs grew at a faster pace, but at the same time, cost pressures increased, says Jörgen Kennemar, head of the Purchasing Managers’ Index analysis at Swedbank.
The upturn in September was broad-based. The increase in new orders made the largest positive contribution to the overall PMI, followed by longer delivery times and higher production, while the employment index held back the upturn. The index for suppliers’ raw material and input prices rose in September to 77.6 from 75.7 in August. This is the highest level since June and indicates that cost pressures have picked up again in the manufacturing sector.
“The high and rising cost pressures are a clear headwind for industrial companies. If this trend continues, there is an increased risk of squeezed margins and of higher input costs being passed on to producers and consumers,” says Jörgen Kennemar.
The Purchasing Managers’ Index for manufacturing (PMI-Total) rose by 1.8 index points to 58.1 in September, from a revised 56.3 in August. This is the highest level since June and thus exceeded its historical average of 54.3 for the fifteenth consecutive month. The September reading indicates a clear strengthening of the manufacturing sector, even though the third quarter showed slower growth compared with the second quarter. The September reading sends a stronger and more convincing economic signal than the summer months. The upturn was primarily driven by a broad improvement in order intake, while growing order backlogs and higher production plans are supporting continued production growth.
Global manufacturing activity strengthened in September, though with clear differences. In the U.S., the preliminary manufacturing PMI rose sharply to 57.0 from 53.9 in August, while the index for the eurozone remained at 52.7. German manufacturing slowed slightly but continued to show solid growth, with an index of 53.8. Manufacturing activity also improved in the UK, where the PMI rose to 52.0. The Chinese PMI index from Caixin, which covers the country’s smaller and privately owned industrial companies, remains in the growth zone but is struggling to gain momentum and is being challenged by weak domestic demand.
