Switzerland: Manufacturing sector weakens in January, but service sector surges
The manufacturing Purchasing Managers’ Index (PMI) produced by Credit Suisse and procure.ch fell to 47.8 in January from a revised 48.8 in December (previously reported: 50.2), coming in below the 50-threshold that separates contraction from expansion in the manufacturing sector. January’s fall was driven by weaker order books and a sharper decline in output.
In contrast, the services PMI rose sharply from a revised 51.3 in December (previously reported: 50.6) to 57.3 in January, the highest reading since April 2019. January’s figure was underpinned by faster growth in business activity, new orders and employment. However, it should be noted that the services PMI index experiences high month-to-month volatility, so it is difficult to gauge the strength of the sector from a single month’s reading.
According to Claude Maurer, head of swiss macro analysis & strategy at Procure: “the growth trend in the service sector seems to be continuing, which confirms our view that despite the weakness in the manufacturing sector, the Swiss economy is set to continue growing in 2020 – albeit at a generally muted pace”.