The Purchasing Managers' Index (PMI) for Swedish manufacturing ended the second quarter with yet another increase, rising from 57.4 in May to 58.3 in June. As a result, the index has remained above its historical average of 54.3 for over a year.
”Swedish industry continues to show strength. The June figures confirm that the recovery has gained broader traction, with rising order intake, higher production, and continued expansionary production plans. At the same time, cost pressures are rising, which could pose a challenge for industrial companies if the price increase becomes prolonged,” says Jörgen Kennemar, head of purchasing managers’ index analysis at Swedbank.
The sub-index for new orders accounted for the largest contribution to the rise in the PMI, followed by production, while the other sub-indices declined slightly. The index for delivery times remains at high levels, signaling strained supply chains. The index for suppliers’ raw material and input prices remains at a high level, registering 81.3 in June, up from 81.2 in May, which is well above its historical average of 57.8.
“Rising input prices are widespread. This points to increased cost pressures in the manufacturing sector and could, in the long run, fuel inflation—a point the Riksbank also raised in its latest monetary policy report in June,” Kennemar notes.
The Purchasing Managers Index (PMI) is an economic indicator for the Swedish economy that is compiled in collaboration between Swedbank and Silf for both the manufacturing industry and the service sector. The purpose of the PMI is to provide a quick assessment of current economic conditions.
