The Swedish manufacturing PMI marked its first reading in expansionary territory since March. The rebound has begun. The headline index rose to 51 in July from June’s 47.3. The reading above 50 suggests that economic activity is expanding again, but from very low levels. There is still a long way back to normal.
Production rose to 55.5, the second straight month of growth. The rise in the sub-index for export orders suggests that foreign demand is picking up, and the index will most likely rise to net positive numbers next month.
The sub-index for delivery times rebounded to 51.5.While the figure has dropped significantly since its peak in April, it is evident that supply-chain distortions still are present even if they are normalizing since most trade partners reopened in June. Furthermore, inventories dropped further in July, indicating towards an uptick in demand.
Nevertheless, employment plans continue to be soft, consistent with expectations that unemployment has not peaked quite yet, noted Nordea Bank.
