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Sweden's PMI rises slightly breaking the decline for the past months

Monday, 03 December 2012
Swedish Purchasing Managers Index, (PMI) which reflects economic activity in the industrial sector, was up in November to 43.2, compared with 43.1 months before. But it is still below the growth barrier of 50 points.

The development of the purchasing managers' index was lower than expected, although the persistent decline has been broken. Analysts had expected an increase to 44.0 in November, according to a compilation of forecasts made by Reuters.

"Manufacturing activity is still significantly weaker than normal," writes Swedbank and Silf, which produces the PMI in a statement.

PMI is based on interviews with about 200 purchasing managers in the manufacturing sector. An index above 50 is considered to indicate growth in the sector tested.
The Swedish krona weakened slightly, while the Swedish bond yields rose after the release of purchasing managers' index.

Behind the marginal index increase, which breaks four months of decline, is a positive development for production and increases in the sub index for delivery times and orders. Meanwhile, employment continued to show deterioration.

"Although companies in the sector plans were slightly less pessimistic, they speak together with reduced orders and shrinking order books for the labour market remains tight," writes Swedbank and Silf.

Sub-index for new orders rose to 40.3, up from 40.1 in October, while the sub-index for order books rose from 38.3 to 40.6. Sub-index for employment fell from 43.0 to 39.0.
"Given the order situation and production plans, it will be some time before manufacturing firms are seeing increased recruitment needs."

Suppliers of raw and intermediate goods prices continued to fall, although a rising index indicates that the decline slowed in November. This suggests that the global demand pressures remained weak.
by Scancomark.com Team

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