Zurich (awp) – The situation improved in the Swiss manufacturing sector in May, without the Purchasing Managers’ Index (PMI) returning to growth. Conversely, services struggled, weighed down by poor prospects for their order books.
In industry, the Purchasing Managers’ Index (PMI) climbed to 46.4 points, 5 index points more than in April. In the services sector, this indicator fell to 48.8 points, compared to 55.6 points a month earlier, UBS said on Monday in its monthly statement prepared in collaboration with procure.ch. Both areas are showing a certain nervousness, summarized the big bank.
The economists surveyed by AWP almost hit the nail on the head for industry, expecting a PMI between 43.5 and 46.0 points. On the other hand, they were too optimistic for services, anticipating a range between 53.0 and 54.0 points.
Since spring 2023, the PMI in industry has shown “pronounced volatility”, summarized UBS. The components of production and order books increased by 10 and 7.5 points respectively, while that of delivery times improved by 4 points, supporting the barometer last month. This indicates highly utilized production capacity, and therefore suggests further upside potential.
On the other hand, employment remains below the growth threshold, a sign of a continued deterioration of the labor market, without this being reflected in increased recourse to partial unemployment. The manufacturing sector “continues to weigh on economic growth”, while the services sector “may slightly support the economy”.
In the latter, the drop of 6.9 index points is mainly attributed to order books, down more than 12 points. Other components, such as commercial activity, new orders and employment, also declined.
The PMI for this part of the Swiss economy has shown great volatility recently, varying by more than 5 points each time over the last three months. We have to go back to the end of 2015 and 2016-2017 to observe such developments. If the indicator found itself above the growth threshold in January, February and April, the progression is nevertheless lower than the long-term trend.
ck/al
