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Swedish PMI for June fell to 48.4 – showing gloomy economic outlook

Monday, 02 July 2012

The Swedish purchasers’ managers Index which determines the feeling in the manufacturing sector fell in June to the zone which shows a gloomy economic outlook.

The index fell below 50 which is the level where the average is taken. Anything below 50 is considered as a depressed situation as such reaching 48.4, it means that the industrial production in the country’s industries is not good.

The fall has been blamed on the weak global economic situation which makes the Swedish manufacturing industry to puts in a lower gear and has been in line with what analysts had expected according to analysts reports. 

“PMI total fell by 0.6 index points in June and reached down to 48.4 - the lowest level since last November. As our world economy weakens, the Swedish industrial activity also follow,” writes Sweden banks which published the PMI

The largest negative contribution to the decline was the drop in orders. Likewise, production and supplier delivery times contributed negatively, while stocks and employment gave positive contribution to PMI in total.

“Enterprises' production plans have been turned down. The more subdued order situation reduces optimism about the increasing activity of the next six months. Corporate also reduces the staff requirements, and instead cuts could be expected,” writes Swedbank.

Suppliers of raw and intermediate goods have seen their prices continue to fall. The global commodity price drop and the stronger exchange rate contribute to the development. The Riksbank also note that the underlying price pressures in the industry are subdued.

The result from the PMI is obtained from a survey of purchasing managers in big organisations in Sweden and in many cases, organisations that carry out international trade.
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