Swedish service sector expansion remains strong

Sweden's service sector continued to grow robustly in August, but the pace of expansion slowed, survey data from Swedbank and the logistics association SILF showed Friday.

The purchasing managers' index for the service sector fell to 64.7 from 69.1 in July. A reading above 50 suggests growth in the sector and the score held above 60 for an eighth month in a row.

The PMI reading is well above its historical average of 55.8. Although the expansion lost momentum in August, there is still a predominance of companies exhibiting increased activity with business plans rising, mostly due to the gradual withdrawal of corona restrictions, Jorgen Kennemar, responsible for the analysis of the Purchasing Managers' Index at Swedbank, said.

The sub-index for business volume dragged the headline index lower, while the measure for employment was largely unchanged. The delivery times sub-index increased.

Input cost pressures remained at historically high levels. The composite PMI, which combines those for manufacturing and services, fell to 63.4 from 67.8 in July.

The pace of growth has slowed more in the industry, while it has rather strengthened in the service sector over the past three months, Kennemar added.