Swedish industrial dexterity starts reversing


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Thursday, 01 September 2011
The downturn in the Swedish industrial operations has begun. Purchasing managers' index fell in August, below the 50 line and is the first time since the spring of 2009 that the index fall outside the outside the growth zone.

Purchasing managers’ index, which reflects activity in the industry, amounted in August to 48.7, compared with 50.1 months before. The decline was steeper than expected. Analysts had on average expected a decline to 49.5, according to a compilation of forecasts made by news agency Reuters.

"The recovery in Swedish industry has thus come to a halt and instead apparently a recession to have begun," writes Swedbank and Silf, which presents the Swedish purchasing managers' index, in a statement.


In August the index was 48.7 from 50.1 in July, which was slightly worse than analysts had expected. The limit for growth is at 50 and below that level, the index has not been since May 2009 means fall. Since January, the purchasing managers' index fell by 12.8 units.

"The image was of a significantly weaker manufacturing activity compared with the spring is very clear, "writes Swedbank, which together with the trade organization Silf publishes the index.

Three of the five sub-indices that make up the index were in August outside the growth zone. The exceptions are sub-indices of employment and stock purchase, but the trend is pointing downwards.
"New employees are needed in the industry, the trend has weakened in recent months in line with the companies' production plans revised down and order situation weakened, "writes Swedbank and Silf.

Price pressure has also drops. "Index of suppliers of raw and intermediate goods prices fell in August to 47.4 from 51.5, its lowest level since the summer of 2009, "writes Swedbank and Silf.
Nordea writes in a commentary that "it is clear that the industrial sector is hit by slowdown in the global economy, which appears to have accelerated in August."
"This gives the Riksbank another reason to keep interest rates at stand still at their meeting on September 6, "writes Nordea.’
By Team

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