| Consensus | Actual | Previous | |
|---|---|---|---|
| Index | 43.0 | 43.0 | 42.1 |
Highlights
Manufacturing activity contracted again at the end of 2023. At 43.0, the SVME PMI was up from November's lowly 42.1 but still well short of the 50-expansion threshold to complete an entire year of sub-50 readings. That said, the latest outturn was at least in line with the market consensus.
All the components remained in negative growth territory although order books and purchasing volumes both recorded smaller falls than in mid-quarter. Production fell more sharply and purchase prices were sharply weaker.
The December update leaves the Swiss RPI at exactly zero and the RPI-P at 30, the sizeable gap between the two measures reflecting the concentration of downside surprises in the inflation data. Real economic activity is running somewhat ahead of forecasts.
All the components remained in negative growth territory although order books and purchasing volumes both recorded smaller falls than in mid-quarter. Production fell more sharply and purchase prices were sharply weaker.
The December update leaves the Swiss RPI at exactly zero and the RPI-P at 30, the sizeable gap between the two measures reflecting the concentration of downside surprises in the inflation data. Real economic activity is running somewhat ahead of forecasts.
Market Consensus Before Announcement
The SVME PMI is expected to rise from November's 42.1 but close out the year still deep in recession territory at 43.0.
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.
