"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, even though the pace of growth was slower than a month ago, still suggesting a modest recovery is underway, while improvement in economic sentiment is pointing at a greater confidence. A survey by Credit Suisse and procure.ch revealed on Friday a gauge of manufacturing activity slowed to 54.2 last month, down from 55.3 a month earlier and below analysts' expectations of a 55.4 figure. The indicator is still hovering above the 50 threshold, which indicates expansion of the sector. Meanwhile, production output stood at 56.9 in October, from 58.9 in September, ending a streak of sixth consecutive monthly gains. In addition to that, the employment sub-index fell to 52.4 from 53.2. The positive news, however, came from purchasing volume and stocks, where subindexes advanced 1.5 and 2.6 points respectively. 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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