"Evidently, the situation for industry has stabilised, although it is too soon to talk about a sustainable recovery"
- Swiss SVME purchasing managers' association and Credit Suisse
Producer and imports prices in Switzerland rose less than expected in June from a month earlier, reflecting that manufacturers are more worried about future economic performance of the country, and raising concerns over weak growth in the second quarter. According to the Federal Statistics, the prices of domestically produced and imported goods advanced 0.1% last month, reversing May's 0.3% fall, and slightly below analysts' expectations of a 0.3% rise. On a yearly basis, prices edged higher 0.2% in May, confronting expectations for a 0.3% rise, however, higher from a 0.2% decrease in May. The report also showed producer and import prices jumped 0.1% in June from a month earlier, while on annual basis producer prices increased 0.5% and costs of imported goods dipped 0.3%.
It is known that producer prices is a key indicator of consumer inflation, and latest data is showing muted price pressure, suggesting additional measures from SNB will be needed to boost the economy and manufacturing sector in particular. Analysts are expecting the nation's manufacturing sector to expand further; however, companies still appear to be sceptical, as they are still showing a little willingness to increase their spending. Last week the SNB said the cap on a Franc is still vital, and as long as they maintain it, the economy is less likely to be affected by the global slowdown and the financial and debt crisis in the neighbouring Eurozone.
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