PMI Rises for Both the Swedish Manufacturing and Services Sectors

The Purchasing Managers' Index (PMI) shows that the weak economy is strengthening further. The manufacturing PMI rose in October to 53.1 from 51.6 in September, marking the third consecutive month that the index has been in the growth zone but below the historical average of 54.3. The services PMI also turned upward, registering at 52.9 in October, compared with 48.9 the previous month.

– Swedish industry posted a positive surprise in October following the slump in the third quarter. “This is a sign of strength, even though the sluggish global economy and the risk of higher tariffs could throw a wrench in the works down the road,” says Jörgen Kennemar, head of purchasing managers’ index analysis at Swedbank. 

In October, the sub-index for new orders made the largest positive contribution to the rise in the manufacturing PMI, followed by delivery times, production, and employment, all of which were above the 50-point mark. Manufacturing companies’ production plans reflect optimism, with the index above the 50-point mark; in October, the index rose further to 62.8 from 59.1 in September. The index for suppliers’ raw material and input prices fell in October for the third consecutive month to 46.7 from 48.7 in September, marking the lowest level since January.

"Falling commodity costs reinforce the picture of a continued weak industrial economy and increase the likelihood of a more expansionary monetary policy," says Jörgen Kennemar

“The October figures point to continued subdued price pressure in the service sector and reinforce the picture of a weak service economy, which also increases the likelihood of further interest rate cuts,” says Jörgen Kennemar.