Manufacturing activity remained in contraction but bounced back from the previous month's losses in June. At 44.9, the SVME PMI was 1.7 points above its May print, posting the first monthly increase of 2023. Despite the monthly gain, manufacturing remains below the growth threshold for the sixth month in a row.

The output index did rise sharply by 7.7 points but volumes, in an indication that June's rebound may not be long lasting, were only just maintained, with this index at 49.1 and just below the growth threshold. Also, while the index for backlogs rose 2.3 points to 41.3, backlogs continued to decline on the month. Employment fell 1.6 points to 50.4, with the proportions of companies hiring and those that are reducing staff now nearly equal.

The purchasing situation continues to ease, with one third of companies reporting shorter delivery times and one fifth reporting lower purchase prices, and the purchase index falling 1.3 points to 42.9.

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).

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.