The PMI posted a second successive print above the 50 growth threshold in March. In fact, at 53.2, the headline index was up a tidy 1.6 points versus its February level and at its highest mark since October 2014.
Promisingly, all of the sub-indices posted gains. In particular, output was up a point at a solid 58.0, a 7-month high, and backlogs gained 1.6 points to 54.9. Quantity of purchases was 4.4 points firmer at 52.1 and, at 51.6, stocks of purchases showed their first increase since August 2014.
The signs are that industry is becoming more optimistic about the future. Even purchase prices (47.0) fell only moderately compared with rates over the last year. Employment (46.1) continues to be cut and at much the same pace as in recent months but in general if today's survey data are anything to go by, first quarter GDP growth could surprise on the upside.
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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