1. Purchasing Managers’ Index – Services April 4, 2012
Services PMI falls to 52.6 in March: service economy cools
somewhat as business activity slows down
The purchasing managers’ index for services (Services PMI) dropped 1.5 points
from 54.1 in February to 52.6 in March. The downward trend thus continues,
though the index remains within the growth zone.
All of the component indices except for supplier delivery times fell in March.
Business activity made the largest negative contribution, followed by new orders.
The increase in supplier delivery times may indicate that service companies are still
working to get through the spike in orders that came in at the beginning of the year.
Service companies’ demand for new employees decreased in March. Meanwhile,
these companies ratcheted up planned business activity for the fourth consecutive
month and they have a positive outlook for the next six months. In addition, the
index for order backlogs, which has a tendency to fluctuate, was higher for Q1 2012
than for Q4 2011.
The index for supplier intermediate goods prices dropped marginally in March. Many
purchasing managers reported unchanged or rising price pressure, though the index
remains far below its March 2011 level.
Services PMI
(Purchasing Managers’
Index - Services)
Seasonally Adjusted
2012 Mar. 52.6
Feb. 54.1
Jan. 54.4
Dec. 51.1
Nov. 49.0
Oct. 49.1
Sep. 51.2
Aug. 53.5
Jul. 54.1
Jun. 53.3
May 56.4
Apr. 60.8
Mar. 60.4
Next publication of Services PMI: Friday, May 4, 2012
Magnus Alvesson Swedbank, Economic Research Department, +46 (0)8-5859 3341
Administration, +46 (0)8-5859 7740, ek.sekr@swedbank.se
Sebastian Bergfelt, Silf, +46 (0)73-944 6450, professionals@silf.se
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4. 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.
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