Unexpectedly gloomy Swedish industrial production in June - PMI


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Friday, 01 July 2011
Swedish industrial buoyancy is gradually dying down in an unexpected fashion especially when compared with observations in two years. New orders from domestic market were particularly weak and those from abroad also showed signs of slow down in June.

According to the Swedish purchasing managers' index published on Friday, the trend of the indicators has turned up surprisingly negative. The purchasing managers' index fell in June to 52.9 from 56.1 in May. This is the lowest level since August 2009 and well below what analysts had expected.

"The Swedish industrial perception is growing at a much slower rate compared to the first quarter when the PMI index hovered around the 60 level, "writes Swedbank and trade association Silf, which publishes the purchasing managers' index, also known as the PMI index.

The index is based on a monthly survey of 200 purchasing managers in the industry.
As in May, all sub indices.  Most notable is that orders from the domestic market fell to 48.8. This is below the 50 level which is the border between the decrease and increase and a decrease meaning that the number of orders was lower than the previous month.
"The number of new orders (from the domestic market) fell in June for the first time in two years, "writes Swedbank and Silf.

Also sub-index of new orders from abroad fell, like the above companies' production plans, production and employment plans. All these indices are still above the 50 mark.
"As a small open economy, Sweden is not immune to the impact of a slowing global economy, as reflected in the purchasing managers' index. Although the main figure is still above the 50 mark it is still obvious that it risk falling below the limit during the fall, which would suggest a more rapid decline in industrial production, "writes Nordea analysts in a statement.
By Team

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