| Actual | Previous | |
| Index | 48.2 | 46.3 |
Highlights
The manufacturing PMI rose to 48.2, seasonally adjusted, in October from 46.3 the previous month, remaining below the expansionary level of 50 for over 30 months. On average over the past twelve months, the headline index has been below 50 by 2.5 points.
The inventory reading rose to 47.3 during the reporting month, up 6.8 points, as the trend in declining orders slowed in October.
Delivery times rose, but at a slower pace than the previous month, with a reading of 51.9 in October, a decline of 4.3 points from September. Still, purchasing managers were reporting further delivery backlogs for electronic components and magnets.
Inventory levels for purchasing and sales are below expansionary levels at 45.4 and 45.9, respectively, and indicate stocks are being worked off. This may be the result of stockpiles being reduced from their pre-US tariff buildup.
After expanding in September, the seasonally adjusted services PMI fell to 47.8 in October from 51.3 the previous month. A lack of new orders also plagued the sector with the index falling 6.9 points to 47.3 in October.
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.