The PMI Composite Index rose in September for the fifth consecutive month, reaching 55.3 in September compared with 53.8 in August. The recovery in the manufacturing sector is thus continuing, and for the first time since fall 2018, the index is above its historical average (54.3).
"A robust influx of orders and increased production are driving the upturn, but the industry is still hesitant to hire new staff," says Jörgen Kennemar, who is responsible for analyzing the Purchasing Managers' Index at Swedbank.
Production and order intake are increasing the most
The sub-indices for production and new orders accounted for the largest increases and reached their highest levels since early 2018 in September. Overall, they contributed 1.8 index points to the rise in the overall PMI. The sub-index for employment declined and remains outside the growth zone, while delivery times increased slightly. Production plans in the manufacturing sector can still be considered expansionary, even though the index declined slightly in September to 59.1.
– It is encouraging that the majority of industrial companies expect to increase production over the next six months, but a rise in the spread of the coronavirus could, in the long run, lead to greater uncertainty about future growth prospects. “The coming months will be decisive,” says Jörgen Kennemar. The price index for suppliers’ raw material and input prices rose in September for the fourth consecutive month to 48.9. This is still well below the historical average (56.7), suggesting continued subdued price pressure from the supplier side.
The Purchasing Managers Index (PMI) is an economic indicator for the Swedish economy conducted in collaboration between Swedbank and Silf for both the manufacturing industry and the service sector. The goal of the PMI is to quickly gauge current economic conditions. Each month, economic data is collected from purchasing managers who are part of a survey panel. An index reading above 50 indicates growth, while a reading below 50 signals a decline.
