| Consensus | Actual | Previous | |
|---|---|---|---|
| Index | 41.7 | 42.1 | 40.6 |
Highlights
Manufacturing activity remained very weak in November but at least the rate of contraction was slower than expected and less than in October. At 42.1, the SVME PMI was 0.4 points stronger than the market consensus and 1.5 points above its previous print. That said, the latest outturn only served to extend the unbroken run of sub-50 readings that began at the start of the year.
Production and orders continued to fall but less rapidly than at the start of the quarter.
The November update leaves both the Swiss RPI and RPI-P at 21, indicating that overall economic activity is finally running somewhat ahead of what the forecasters anticipated. Even so, with headline and core inflation having seemingly stabilised below 2 percent, the SNB should still leave policy on hold later this month.
Production and orders continued to fall but less rapidly than at the start of the quarter.
The November update leaves both the Swiss RPI and RPI-P at 21, indicating that overall economic activity is finally running somewhat ahead of what the forecasters anticipated. Even so, with headline and core inflation having seemingly stabilised below 2 percent, the SNB should still leave policy on hold later this month.
Market Consensus Before Announcement
The SVME PMI is expected to climb from October's 40.6 to 41.7 in November but remain deep in recession territory.
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.
