| Actual | Previous | |
| Index | 49.7 | 48.2 |
Highlights
The Purchasing Managers Index rose to its highest in at least a year November, and with a reading of 49.7, remains just below the threshold of expansion. The services component, however, slipped to 45.3 from 47.8 in October.
With the tariff agreement between the United States and Switzerland, businesses were more optimistic, with those expecting constraints to trade having fallen by 20 points.
This is a welcome improvement to the overall situation, but the services component does add a note of negativity to the overall result. The demand component fell by 1 point to 46.2 in November, while the inventories component fell 7.4 points to 41.6.
Still, there is relief in the wake of the tariff agreement which should help underpin business sentiment in the coming months.
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.