| Consensus | Actual | Previous | |
|---|---|---|---|
| Index | 50.4 | 48.9 | 49.3 |
Highlights
Manufacturing activity unexpectedly contracted for a second straight month in February. At 48.9, the SVME PMI was down 0.4 points versus January and 1.5 points short of the market consensus. This is its weakest reading since June 2020.
Production and order backlogs continued to decline as did headcount and purchasing volumes. Price rises were also less marked and vendor performance improved.
Taken at face value, the latest outturn points to a possible negative print for first quarter GDP growth although in practice, the correlation between the two is not particularly good. In any event, today's report puts the Swiss ECDI at 18 and ECDI-P at minus 5 implying that overall economic outperformance continues to mask an undershoot by the real economy.
Production and order backlogs continued to decline as did headcount and purchasing volumes. Price rises were also less marked and vendor performance improved.
Taken at face value, the latest outturn points to a possible negative print for first quarter GDP growth although in practice, the correlation between the two is not particularly good. In any event, today's report puts the Swiss ECDI at 18 and ECDI-P at minus 5 implying that overall economic outperformance continues to mask an undershoot by the real economy.
Market Consensus Before Announcement
The headline index is expected to move back above 50 but at 50.4, indicate only sluggish growth.
Definition
The SVME (Schweizerischer Verband für Materialwirtschaft und Einkauf) 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).
Description
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.
