The new PMI survey signalled little change in manufacturing conditions last month. At a slightly weaker than expected 49.7, the index was down a point versus its October outturn but, while back below the 50 growth threshold, close enough to that mark to suggest that activity essentially stagnated. The PMI has been oscillating around 50 since May.
Today's results suggest that, having failed to grow in July-September, the economy continued to struggle this quarter. With prices still as weak as ever, the onus is on the SNB to provide additional easing, almost irrespective of what the ECB elects to do on Thursday.
The SVME Purchasing Managers Index (PMI) tracks trends in Swiss manufacturing. Around 200 Swiss industrial companies are surveyed.
The PMI is very sensitive to the business cycle and tends to match growth or decline in the economy as a whole. To construct the PMI the Swiss Association of Purchasing and Materials Management conducts monthly surveys of purchasing executives on their performance in the current month versus the previous period. Because the amount of materials ordered by purchasing managers parallels the level of manufacturing production, the PMI is a gauge of production growth. The results are indexed with a centerline of 50; values above 50 indicate expectations of expansion and values below 50 indicate expectations of contraction for the manufacturing sector.
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