Economy on track despite August hiccup

The Purchasing Managers’ Index (PMI), which measures the manufacturing industry business cycle, fell in August to 52.4 from 54.3 in the previous month. An index over 50 indicates economic growth.

“Even if the monthly comparisons should be interpreted with a certain degree of care, the overall trend is clearly upwards. For the period June to August the PMI has risen 12.7 index points compared with the most recent previous period (March to May),” wrote Swedbank and Silf Competence – a provider of development services for purchasing, sourcing and supply professionals – in a joint press release.

The Purchasing Managers’ Index is constructed from interviews with around 200 purchasing managers within the manufacturing industry. An index over 50 indicates industry growth.

Orders from export markets have shown the strongest rise in the sector. That index rose 4.7 percent to 61.1.

“Industrial companies have been more optimistic about future business conditions, which is why a growing number of companies plan to increase production over the next six months,” the statement said.

However, job vacancies are still weak, with that part of the index rising only marginally to 40.6.

“The number of people employed in industry continues to shrink, but to a lesser extent than previously. A contraction in delivery times suggest that demand in the industrial sector will continue to remain low, meaning a turnaround in the labour market is likely to take some time,” write Silf and Swedbank.

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