| Consensus | Actual | Previous | |
|---|---|---|---|
| Index | 45.6 | 40.6 | 44.9 |
Highlights
Manufacturing activity contracted again in October and at a significantly faster rate than expected. At 40.6, the SVME PMI was fully 5 points short of the market consensus and nearly 4 points below its September print. The latest reading was only a 2-month low but just 2.1 points above July's 14-year trough and easily weak enough to suggest that manufacturing had a very poor start to the current quarter.
Production, orders and purchasing volume all fell again and, in contrast to September, were joined by employment. Deflation also remained a feature.
The latest reading means that the headline index has still been below the 50-expansion threshold every month so far this year. For the broader economy, today's surprisingly weak report puts the Swiss RPI at minus 4 and the RPI-P at 15. Overall economic activity is performing much as expected but would be outperforming but for the unanticipated softness of prices.
Production, orders and purchasing volume all fell again and, in contrast to September, were joined by employment. Deflation also remained a feature.
The latest reading means that the headline index has still been below the 50-expansion threshold every month so far this year. For the broader economy, today's surprisingly weak report puts the Swiss RPI at minus 4 and the RPI-P at 15. Overall economic activity is performing much as expected but would be outperforming but for the unanticipated softness of prices.
Market Consensus Before Announcement
October's PMI is seen creeping up from September's lowly 44.9 to 45.6.
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.
