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Sweden's industrial activities measured in PMI fell to 49.6 in April

Thursday, 02 May 2013

In March, the Swedish Purchasing Managers' Index (PMI) was 52.1 and there was increased dexterity that the economy was back on the growth path. However, suddenly, the celebrated industrial recovery has taken a reverse turn.

Latest figures released by Swedbank and the Organisation SIF show that the Swedish PMI fell by 2.5 index points to 49.6 in April from 52.1 in March. The decline was broad and all sub-indices made a negative contribution to PMI during the month.

After two months in the growth zone, the Purchasing Managers' Index has fallen back below the 50 mark, which is the level of growth. PMI is based on interviews with about 200 purchasing managers in the manufacturing industry. An index above 50 is considered to indicate growth in the industry.

Despite all, the level remained above those observed during the second half of last year.

Orders made the largest negative contribution to PMI, and is blamed for more than more than half of the decline. Fall in orders was observed more in the decline in the domestic market. Declining orders also meant that manufacturing companies order books again fell below the 50 mark.

The index of production plans fell, to 55.9 in April from 60.5 in March. The index indicates still a growing production over the next six months, despiet the slow down in production plans. The sub-index for production was recorded at 52.8 and is still in the growth zone. A weaker employment index suggests that companies remain cautious about hiring.

Index of suppliers of raw and intermediate goods prices fell by nearly 9 index points and the index ended at 37.4 in April, its lowest level since May 2009. Price drop in producer prices is probably linked to the strong Swedish krona and weak demand pressures in the supply chain.

By Team

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