As CS announced on Thursday, the purchasing managers index (PMI) in the industry fell 1.0 points to 53.9 points in November. Economists surveyed by the AWP news agency had expected a decline in the range of 53.0 to 54.4 points, and therefore expected the negative to be of this magnitude. However, CS writes that the index is still well above the 50-point growth threshold.
Unlike its counterparts in the Eurozone, it does not show any contraction. Another positive aspect is that production continues to increase. The related subcomponent rose slightly in the reporting month. At the same time, employment increased more broadly than in the previous month. As CS wrote, nearly every third industry company is hiring right now.
On the other hand, the order backlog showed a slowdown in November. The related subcomponent is trading below the growth threshold for the first time since summer 2020. Unfilled order books therefore led to the expectation of weaker production dynamics in the future. As a result, companies also made fewer purchases than in previous months.
PMI basically measures how optimistic purchasing managers are about future economic developments. CS calculates the index together with the industry association Procure.ch. For comparison: At the height of the corona crisis, the industrial index had dropped to 41.2 points.
Contrary to the industry, the weather did not change in November in the service sector, which tends to focus more on the domestic economy. The corresponding PMI was almost unchanged at 53.5 points (53.6 in the previous month). As a result, the services PMI stays above 50, which indicates growth. Economists had expected a value between 52.0 and 52.4 and were therefore more pessimistic.
Commercial activity, and thus the equivalent of industrial production, lost some of its momentum compared to the previous month. However, despite a slight loss of momentum, backlogs continue to rise. The corresponding subcomponent is also still listed above the growth threshold.
But the margin situation remains tense: In November, more than either company faced higher purchase prices. On the other hand, not one out of every three companies increased their sales prices. This suggests that margins have fallen somewhat, explains CS.
As in the industry, almost no company in the service sector is considering downsizing. While only 10 percent reported less employment compared to the previous month, the rate of companies adding personnel increased compared to the previous month. They say the good labor market situation may be one of the reasons for continued solid consumption in Switzerland.
(SDA)