The Swiss Times - Swiss News in English

Sentiment in Swiss industry barely brightens

Updated at 02 Apr 2024 8:50 am

The mood in Swiss industry has barely brightened. Although the Purchasing Managers' Index (PMI) rose slightly in March, it remained below the growth threshold. There was also a setback in the services sector.

The PMI for industry rose slightly by 1.2 points to 45.2 points in March, but remained below the growth threshold for the fifteenth time in a row, as UBS reported on Tuesday. It calculates the index together with the Swiss purchasing and supply management association Procure.ch. Economists surveyed by the news agency AWP had expected this and forecast the index to be between 44.2 and 46.0 points.

The low point in the current cycle was in July 2023 at 38.5 points, when it plummeted to its lowest level since 2009. It has now been in contraction for longer than during the major financial crisis. With the PMI, values above 50 points indicate growth and values below 50 points indicate a decline in the economy.

Production and order backlog less pessimistic

Both the sub-components for production and the order backlog contributed significantly to the slight increase in the overall index, the report continues. Both were less pessimistic than previously. Employment should also benefit from this improvement. Although the sub-component still points to a fall in employment, the decline has slowed compared to February.

Meanwhile, the situation in the Middle East has hardly calmed down, but the impact on Swiss industry has so far remained limited.

Services sector suffers setback

There was a "sensitive" setback in the services sector. Here, the corresponding index fell by 5.4 points to 47.6 points and is therefore no longer above the growth threshold for the first time since last summer. According to the experts, all components contributed to this decline.

The March figure could therefore signal that the weakness in industry has now also spilled over into the services sector. The services PMI had already plummeted in December 2022 and July 2023. However, as the weakness did not continue, these months were considered outliers. The next few months will now provide clarity. The continued solid labor market still speaks against a deterioration in sentiment.

©Keystone/SDA

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