The February PMI weighed in at 51.6, up from 50.0 in January and its highest reading in more than a year. This was the first time since October-December 2014 that the index has registered at least 50 for three consecutive months and suggests that the economic recovery is slowly starting to gain traction.
Production (56.9) saw its fastest growth since last August and backlogs (53.3) returned to expansion territory. However, stocks of purchases (45.5) and stocks of finished goods (45.0) remained well below 50 and employment (45.6) shrank more quickly than in January. Purchase prices (43.8) also continued to slide sharply.
Today's mixed bag suggests that Swiss industry is coping with the strong CHF rate but only by reducing sector headcount which, in turn, poses a threat to medium-term prospects for consumption.
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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