CH: SVME Purchasing Managers' Index

Wed Jan 03 02:30:00 CST 2018

Consensus Actual Previous
Level 64.6 65.2 65.1

The December PMI survey was again very upbeat about Swiss business activity. At 65.2, the headline index was up 0.1 points versus its already very robust November print and at its highest level since July 2010. The latest reading continues to indicate boom conditions.

Growth of output (down 2.9 points at 64.8) and quantity of purchases (down 1.5 points at 63.6) slowed but both remained at a very high level and backlogs (up 0.5 points at 70.0) saw their largest increase in seven years. Consequently, employment (up 3.5 points at 58.2) posted its best performance since February 2011. Purchase prices (up 1.5 points at 72.1) were also strong and saw their second highest reading of the year. This may in part reflect capacity pressures but more probably the slide in the CHF.

Overall, the December results point to a very healthy fourth quarter for the Swiss economy.

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.