CH: SVME Purchasing Managers' Index

Thu Feb 01 02:30:00 CST 2018

Consensus Actual Previous Revised
Level 64.0 65.3 65.2 65.6

The boom conditions that characterised Swiss manufacturing at the end of 2017 show little sign of easing this quarter if the January PMI is anything to go by. At 65.3, the headline index was just 0.3 points short of December's upwardly revised multi-year high.

Output (65.8) and backlogs (69.8) were once again exceptionally robust and, despite some slowdown, quantity of purchases (60.7) was similarly very strong. Employment (55.0) was above the 50 growth threshold for a thirteenth consecutive month while prices (73.7) accelerated further as the effects of CHF losses continued to feed through.

Taken together with a 5.3 point bounce in the services PMI to 62.8, today's manufacturing results should bode very well for Swiss economic activity this quarter.

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.