Switzerland: Manufacturing PMI records worst reading since October 2020 in October; services PMI improves

The Credit Suisse/procure.ch Manufacturing Purchasing Managers' Index (PMI) came in at 54.9 in October, down from September's 57.1. October's result marked the weakest reading since October 2020. Consequently, the index remained above the 50.0 no-change threshold, pointing to a continued, albeit moderating, improvement in manufacturing sector operating conditions from the previous month. Switzerland’s manufacturing PMI reading compares extremely favorably to that of the Euro area, likely as the Swiss industrial sector is dominated by chemicals and pharmaceuticals, which are relatively resilient to cyclical economic shifts.

The headline print reflected weaker growth in output, employment and new orders, likely partly influenced by deteriorating external dynamics. In contrast, the more domestically-focused Services PMI stood at 53.6 in October, up from September’s 52.3 and driven by faster growth in business activity and order books. The robust domestic labor market is likely supporting the services sector.

FocusEconomics Consensus Forecast panelists project the economy to expand 0.8% in 2023, which is down 0.2 percentage points from the previous month’s forecast, and 1.7% in 2024.