Switzerland: Manufacturing PMI plunges to over four-year low in March; services sector also loses momentum
April 1, 2019
The manufacturing Purchasing Managers’ Index (PMI) produced by Credit Suisse and procure.ch tumbled to an over four-year low of 50.3 points in March from 55.4 points in February. Nevertheless, the index remained a hair above the 50-point threshold that separates expansion from contraction in the manufacturing sector. Weakening European industry and the incipient global growth slowdown appear to be weighing on the Swiss manufacturing conditions.
March’s decline came largely on the back of a deterioration in production, which swung to contractionary territory in the month. Moreover, stocks of raw materials and inventories of finished goods both fell in the month, and companies scaled back their purchasing activity, suggesting they are already beginning to adjust to weaker demand prospects. Meanwhile, new business inflows softened in the month and in turn, job creation slowed notably. On the flipside, delivery times shortened.
Turning to the services sector, the services PMI edged down to a nearly two-and-a-half-year low of 54.4 points in March from 55.7 points in February, dragged down by a sharp slowdown in commercial activity. On a brighter note, new orders and order books rose faster in March, while companies increased staff levels at a stronger rate, pointing to sustained demand in the months ahead.
Author: Lindsey Ice, Economist