"Given the vibrant production activity and the solid volume of orders on hand, businesses evidently are hiring more personnel or are laying off fewer workers"
- Swiss SVME purchasing managers' association and Credit Suisse
Activity at Swiss manufacturing sector expanded for a sixth consecutive month in September, accelerating further from previous month's reading, suggesting a modest recovery is underway, while improvement in employment is pointing to greater confidence. A survey by Credit Suisse and procure.ch revealed on Tuesday a gauge of manufacturing activity advanced to 55.3 last month, up from 54.6 a month earlier and above analysts' expectations of a 54.9 figure. The indicator moved further above the 50 threshold, which indicates expansion of the sector. Meanwhile, production output was pushed higher up to 58.9 in September, from 53.2 in August, posting sixth consecutive monthly gain. In addition to that, the employment sub-index jumped to 53.2 from 49.1, moving back into positive territory for the first time in two years. The only component that disappointed was the gauge of backlog orders, which edged down to 58.5 from 59 in August. Resilient domestic demand was on the main pillars of the economy so far, however, its fortunes are closely tied to the Eurozone, which is only starting to recover. Even though both Swiss and Eurozone economies are starting to improve, risks for recovery are still high. One of the major concerns for the SNB is overvalued domestic currency, which is weighing on Swiss exporters. However, recent performance of EUR/CHF is decreasing pressure on Swiss authorities, and suggesting shipments from Switzerland should accelerate over foreseeable future, even despite a drop in the number of orders.
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