| Consensus | Actual | Previous | |
|---|---|---|---|
| Index | 44.4 | 44.0 | 43.1 |
Highlights
Overall conditions in manufacturing continued to deteriorate in February. At 44.0, the SVME PMI was up from January's 43.1 but still short of the market consensus and fully 6 points below the 50-expansion threshold. Accordingly, the sector extended its unbroken run of sub-50 readings that began back at the start of 2023.
Output, orders and purchasing volume all fell at slower rates but there were also fresh declines in both purchasing prices and employment.
The surprisingly soft headline index reduces the Swiss RPI to minus 21 and the RPI-P to exactly zero. In other words, although economic activity in general is falling short of market forecasts, it is doing so only due to the surprising weakness of inflation, the key focus of the SNB policy meeting later this month.
Output, orders and purchasing volume all fell at slower rates but there were also fresh declines in both purchasing prices and employment.
The surprisingly soft headline index reduces the Swiss RPI to minus 21 and the RPI-P to exactly zero. In other words, although economic activity in general is falling short of market forecasts, it is doing so only due to the surprising weakness of inflation, the key focus of the SNB policy meeting later this month.
Market Consensus Before Announcement
The PMI is expected to gain more ground in February but, at 44.4, remain deep in contraction 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.
