| Consensus | Actual | Previous | |
|---|---|---|---|
| Index | 48.9 | 47.0 | 48.9 |
Highlights
Manufacturing activity slowed by more than expected in March. At 47.0, the SVME PMI was nearly 2 points short of both the market consensus and its February's mark and so further below the 50-expansion threshold. This was its weakest reading since June 2020.
The headline drop was mainly due to softer demand and this masked essentially flat production and a small increase in employment. Of note, prices declined for the first time in more than two years.
Taken at face value, the latest outturn increases the risk of a negative print for first quarter GDP growth although the hard data released so far have been more optimistic. In any event, today's report reduces the Swiss ECDI to minus 21 and the ECDI-P to minus 25, both measures showing that overall economic activity is falling behind the forecasters' predictions.
The headline drop was mainly due to softer demand and this masked essentially flat production and a small increase in employment. Of note, prices declined for the first time in more than two years.
Taken at face value, the latest outturn increases the risk of a negative print for first quarter GDP growth although the hard data released so far have been more optimistic. In any event, today's report reduces the Swiss ECDI to minus 21 and the ECDI-P to minus 25, both measures showing that overall economic activity is falling behind the forecasters' predictions.
Market Consensus Before Announcement
The headline index is seen unchanged at January's 48.9.
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.
