01.06.202010:28:00UTC+00Sweden Manufacturing Sector Contraction Slows In May

Sweden's manufacturing sector shrank at a softer pace in May, as restrictions to contain the coronavirus, or Covid-19, pandemic eased, survey data from Swedbank and the logistics association SILF showed on Monday.

The Purchasing Managers' Index for the manufacturing sector increased to 39.2 in May from 36.4 in April. Nonetheless, any reading below 50 indicates contraction in the sector.

The economic downturn in the manufacturing industry has slowed down, but it is too early to judge whether the economic downturn has passed even though the likelihood of a recovery has increased, Swedbank analyst Jorgen Kennemar said.

Among the sub-index, the production and order intake indices reported the largest increases in May. Employment declined in the month, and delivery time decreased.

Production plans for the next six months have became less pessimistic in May, which is a noticeable improvement and a positive economic signal compared to the bottom level in April, Kennemar said.

Price pressure from the supply chain decreased in May and indicated a continuous weaker price pressure annually from the supplier level.