Economy Swiss purchasing managers' indices remain gloomy

The recovery in Swiss industry is a long time coming. The managers responsible for purchasing have lowered their assessments again. By contrast, the services PMI remained in growth territory in November.

The Purchasing Managers' Index (PMI) for industry fell by 1.4 points to 48.5 points in November (seasonally adjusted). It therefore failed to cross the growth threshold: PMI values above 50 points indicate growth and values below that indicate a decline.

This means that the indicator has now remained below the 50-point mark for 23 months, as UBS announced on Monday. The major bank publishes the index together with the purchasing and supply management association Procure.

However, it has stabilized at a level that only points to a slight contraction in the industry. The stabilization of the Swiss PMI contrasts with the continued weakness of the PMIs in the eurozone. If there is no recovery in the eurozone, the risks for the Swiss PMI are also pointing downwards, according to the economists at UBS.

The production and order backlog components have weakened compared to October, but are still just above the growth threshold, they say. Meanwhile, order books have not grown "noticeably" in the last three months, but at least there has been no further decline in orders since September.

Services PMI stable

Meanwhile, the PMI for the services sector remained at a seasonally adjusted 51.8 points in November. After volatile summer months, it thus remained above the growth threshold for the second month in a row.

The business activity and orders components in particular had overcome their "summer lows". However, a rise in the overall index was prevented by a decline in the order backlog component. And the employment component indicates that the situation on the labor market has eased.

Trump and protectionism

The purchasing managers were also asked how they believe the election of Donald Trump as US president will affect them. In 2016, around a quarter of purchasing managers expected an increase in protectionist measures against their export products after Trump's first election.

This proportion doubled in the second survey in 2024, UBS noted. According to the press release, the companies surveyed expect China in particular to introduce further trade restrictions in addition to the USA. However, local industrial companies do not foresee an "immediate" realignment of their US business.

SDA