Purchasing Managers’ Index – Services 6 May 2011Services PMI climbs to 61.4 in April: the service economystabilizes at a high level• The purchasing managers’ index for service companies (Services PMI) rose marginally from 61.2 in March to 61.4 in April. The index trend over the past few months indicates continued improvement in the economy within the private services sector, albeit at a lower rate.• Of the four component indices, new orders accounted for the largest positive contribution, followed by a modest increase in delivery times. The indices for business activity and employment dropped in April, but remain in the upper part of the growth zone.• The index for planned business activity fell from 70.3 in March to 68.1 – its lowest level since February 2010. Despite companies’ downward revisions in production plans, this index level suggests continued expansion over the next six months albeit at a lower rate.• The index for suppliers intermediate goods prices dropped from 65.7 in March to 65.1 in April. Higher transportation costs due to the high price of oil and the strong Swedish economy will likely contribute to rising price pressure in the private services sector. This index has increased by 4.9 points since April 2010. 75 Purchasing Managers Index - Services 70 65 60 55 50 45 Seasonally Adjusted 40 Original 35 30 okt feb jun okt feb jun okt feb jun okt feb jun okt feb jun okt feb 05 06 07 08 09 10 11 Next publication of Services PMI: Wednesday June 7, 2011
Silf/Swedbank’sPurchasing Managers’ Index – Services- objectives and methodologyHistory 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 1994Participants About 200 purchasing managers in the service sector.Publication Third weekday of each month, 8:30 am.Analysis Period Comparison with previous month.Compositionof PMI – Services (%) New orders (within the company) 35 Business activity (within the company) 25 Employment (within the company) 20 Suppliers’ Delivery Times 20Other leading indicators(not included in PMI – Services) Backlog of Orders Suppliers’ intermediate goods prices Planned business activity next six monthsObjective Quick economic indicator Simple statistics Statistics with relatively short publication intervals Constant contact with a well-informed professional groupCalculation 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.