CH: SVME Purchasing Managers' Index

Mon Oct 02 02:30:00 CDT 2017

Consensus Actual Previous
Level 60.6 61.7 61.2

The September PMI points to another buoyant period for Swiss manufacturing. At 61.7, the sector index was up 0.5 points versus its August mark, its highest level since February 2011and its fourth increase in as many months.

September's rise means that the PMI has been above its long-run average for more than a year now and the latest reading should again be consistent with near-boom conditions. However, the survey has been a poor leading indicator of economic growth so far in 2017 with the official data showing real GDP rising at just a quarterly rate of 0.1 percent in January-March and 0.3 percent in April-June.

The Association for Purchasing and Supply Management's Purchasing Managers' Index (PMI) is produced in conjunction with Credit Suisse. The PMI provides an estimate of manufacturing business activity for the preceding month by using information obtained from a representative sector of purchasing managers. Results are synthesised into a single index which can range between zero and 100. A reading above (below) 50 signals rising (falling) activity versus the previous month and the closer to 100 (zero) the faster is activity growing (contracting).

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.