The Recovery of Swedish Industry Stalls

Swedish industry's recovery is slowing down. The purchasing managers' index for the manufacturing industry fell to 49.2 in July, according to the monthly measurement made by Swedbank and the purchasing managers' organization Silf.

» Published:

The Recovery of Swedish Industry Stalls
Photo: Björn Larsson Rosvall/TT

Share this article

It can be compared with the downwardly revised 53.0 in June and the analysts' expectations, which according to Bloomberg's compilation, were at 54.0.

An index below 50 indicates decreased activity in the sector.

I was a bit surprised myself that July was so weak, but one should remember that the vacation effect plays a major role in July, while many are also doing planned maintenance work then, says Jörgen Kennemar, responsible for the analysis of the index at Swedbank, to TT.

Too early to conclude a downturn

It is the first time since February that the index is outside the growth zone, i.e. below 50. At the same time, similar indexes have fallen in the eurozone, China, and in the USA.

We have seen growth for several months and now there was a small dip. It takes a few months with negative figures before we can conclude that it has turned down, says Jörgen Kennemar.

The sub-index for incoming orders had in July the lowest level in nine months and made the largest contribution to the decline. The fall was a whole 9.2 units compared to June, down to 44.1.

It is primarily this that is behind the decline in the entire PMI, as it accounts for 30 percent of the entire index. The negative development in the eurozone affects demand, but here too, there are major vacation effects, says Jörgen Kennemar.

Companies optimistic

The industrial companies' production plans are still in an expansive phase. The index fell to 60.2 from 63.1 in June, but seen over the last three months, the trend is upward.

It is an index that stands outside PMI and it still shows that there is an overweight of companies planning to increase production.

The index for suppliers' raw and input material prices rose to 58.3, which is the highest level since October 2022. A weaker krona and the suppliers being able to raise costs after several months of positive development are underlying factors, according to Jörgen Kennemar.

Tags

Author

TTT
By TTEnglish edition by Sweden Herald, adapted for local and international readers

More news

Trump Extends TikTok Deal Deadline to December 16

Trump Extends TikTok Deal Deadline to December 16

NHTSA Investigates 174,000 Tesla Cars Over Door Handle Issues

NHTSA Investigates 174,000 Tesla Cars Over Door Handle Issues

Ford Cuts 1,000 Jobs at Cologne Factory Amid Weak Electric Car Demand

Ford Cuts 1,000 Jobs at Cologne Factory Amid Weak Electric Car Demand

Swedish Households Shift from Borrowing to Diverse Savings Strategies

Swedish Households Shift from Borrowing to Diverse Savings Strategies

German Investor Confidence Surges Unexpectedly in September

German Investor Confidence Surges Unexpectedly in September

Norway Forecasts Limited Interest Rate Cuts Amid Economic Growth

Norway Forecasts Limited Interest Rate Cuts Amid Economic Growth

H&M Stock Rises Amid Stockholm Market Decline

H&M Stock Rises Amid Stockholm Market Decline

Gold Buyer Guldbrev to List on Stockholm Stock Exchange Amid Criticism

Gold Buyer Guldbrev to List on Stockholm Stock Exchange Amid Criticism

Financial Supervisory Authority Reviews SSAB's 33.3 Billion Kronor Write-Down

Financial Supervisory Authority Reviews SSAB's 33.3 Billion Kronor Write-Down

Weakening Dollar: Key Considerations for Investors

Weakening Dollar: Key Considerations for Investors

Asian Stock Markets Rise Following Trump's Trade Talks Update

Asian Stock Markets Rise Following Trump's Trade Talks Update

Court Rules Fed Member Lisa Cook Can Stay Amid Trump's Challenge

Court Rules Fed Member Lisa Cook Can Stay Amid Trump's Challenge

Tesla Stock Surges 3.6 Percent Boosting Wall Street Indexes

Tesla Stock Surges 3.6 Percent Boosting Wall Street Indexes

Trump Proposes Ending Quarterly Reports for Wall Street Companies

Trump Proposes Ending Quarterly Reports for Wall Street Companies

EU Regulators Seek Stricter Crypto Supervision by ESMA

EU Regulators Seek Stricter Crypto Supervision by ESMA

Elon Musk Buys $1 Billion in Tesla Shares, Boosting Stock by 7%

Elon Musk Buys $1 Billion in Tesla Shares, Boosting Stock by 7%

China Investigates Nvidia for Competition Law Violations

China Investigates Nvidia for Competition Law Violations

USA and China Agree on Tiktok Deal Framework

USA and China Agree on Tiktok Deal Framework

Black Soldier Fly Oil and Protein Developed for Animal Feed

Black Soldier Fly Oil and Protein Developed for Animal Feed

Basmati Rice Dispute Stalls EU-India Trade Agreement

Basmati Rice Dispute Stalls EU-India Trade Agreement