Swedish December Services Production Falls Less Than Estimated
Sweden’s services industry shrank less than economists estimated in December after a decline in order intake eased and business volumes increased.
An index based on responses from about 200 purchasing managers in the services sector rose to a seasonally adjusted 49.1 in December, compared with a revised 46.3 the previous month, Stockholm-based Swedbank AB (SWEDA), which compiles the index, said in a statement today. The median estimate of four economists surveyed by Bloomberg was for a reading of 47.2. A number below 50 signals a contraction.
“Companies’ business volumes and delivery times were the main contributors to the increase,” Swedbank said in the statement. “The decline in order intake abated.”
Sweden’s manufacturing industry contracted for a fifth consecutive month in December as the euro-area debt crisis erodes demand for the Nordic country’s exports, about 70 percent of which go to Europe. Sweden’s government on Dec. 21 cut its economic outlook for this year and next, projecting 1.1 percent growth in gross domestic product in 2013, versus an earlier estimate for a 2.7 percent expansion.
The Riksbank on Dec. 18 reduced its benchmark interest rate for a fourth time in 12 months to revive economic growth, cutting the repo rate by a quarter of a percentage point to 1 percent.
The PMI’s sub-index for planned business volumes rose to 55.9 last month from 49.9 in November, the highest level since August. It indicates that a majority of Swedish services companies see increased or unchanged business volumes in the next six months, Swedbank said.
The business volume index for December increased to 48.9, compared with a reading of 44.9 a month earlier, while the order index rose to 48.8 from 46.8. The employment index advanced to 48.5 from 48.2 while the delivery time index increased to 50.2, compared with 45.4 in November -- its first expansion since April.
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