1. Purchasing Managers’ Index – Services September 13, 2011
Services PMI drops to 54.0 in August: flagging business
activity dampens the service economy
The purchasing managers’ index for services (Services PMI) fell from 54.5 in July to
54.0 in August. The index remains in the growth zone, as the rapid cooling we have
observed since the beginning of the year appears to be leveling off.
The component indices for business activity and employment decreased in August,
while new orders made a positive contribution to the Services PMI. Supplier delivery
times remained unchanged from July to August.
The index for service companies’ business plans also dropped in August, albeit from
a high level. The index for inventories fell marginally, landing under the 50 mark.
The index for intermediate goods prices increased somewhat in August, bucking the
falling trend observed during 2011. The easing of cost pressure reflects the global
economic cooling trend.
75
Purchasing Managers’ Index – Services
70 Services PMI
(Purchasing Managers’
65 Index - Services)
Seasonally adjusted
60 2011 Aug. 54.0
Jul. 54.5
55 Jun. 53.6
May 56.6
50
Apr. 60.8
Mar. 60.7
Feb. 61.9
45 Jan. 65.5
Seasonally adjusted
Original 2010 Dec. 65.8
40 Nov. 64.0
Oct. 63.5
35 Sep. 60.8
Aug. 64.6
30
05 06 07 08 09 10 11
Next publication of Services PMI: Wednesday, October 5, 2011
Magnus Alvesson, Swedbank, Ekonomiska sekretariatet, tfn 08-5859 3341
Administration, tfn 08-5859 7740, ek.sekr@swedbank.se
Sebastian Bergfelt, Silf, 073-944 6450, professionals@silf.se
4. Purchasing Managers Index - Services
August 2011, continued
Silf/Swedbank’s
Purchasing Managers’ Index – Services
- objectives and methodology
History Silf and Swedbank AB publ. made the first joint – internal – calculation of
the “Purchasing Managers’ Index” for the service sector of the four
indexes (PMI) during 2005. The model for PMI – Services is the U.S.
based Non-Manufacturing Index and the Swedish PMI, which has been
published since November 1994
Participants About 200 purchasing managers in the service sector.
Publication Third weekday of each month, 8:30 am.
Analysis Period Comparison with previous month.
Composition
of PMI – Services (%) New orders (within the company) 35
Business activity (within the company) 25
Employment (within the company) 20
Suppliers’ Delivery Times 20
Other leading indicators
(not included in PMI – Services) Backlog of Orders
Suppliers’ intermediate goods prices
Planned business activity next six months
Objective Quick economic indicator
Simple statistics
Statistics with relatively short publication intervals
Constant contact with a well-informed professional group
Calculation According to “diffusion index”. Positive changes are noted in percent for
the four sub indexes. The percentage of unchanged replies, multiplied by
0.5, is added to this figure. Then the different sub indexes are weighted as
described above to reach the total index. The Purchasing Managers’
Index – Services does not indicate activity levels but rather monthly
changes in activity in the service sector.
“Break-even” The dividing line between growth and decline – in line with US praxis –
has been drawn at a total index of 50. However, this boundary or “neutral
growth zone” should not be applied excessively. Rather, “Break-even” at
50 indicates a target value.
We believe we have used reliable sources and procedures to generate and analyze the Purchasing Managers’ Index (PMI –
Services). However, Swedbank AB (publ) and SILF (earlier Organisationen för Inköp och Logistik, /I&L/ – The Organization
for Purchasing and Logistics) cannot guarantee the accuracy or completeness of the analyses and cannot be responsible for
any errors or omissions in the basic data or processing thereof. The reader should base any decisions on other background
material as well.
Swedbank AB (publ), SILF. their employees, and other coworkers accept no liability whatsoever for any direct or
consequential loss or injury of any kind arising from any errors or omissions in the analyses presented in the Purchasing
Managers’ Index – Services.
4 (4)