"The downturn of Swiss industry is thus continuing, and the price and margin pressure in particular appear to be too great."
- Credit Suisse
Swiss manufacturing activity decreased in September, just after its recent recovery in August, while retail sales in the Alpine economy dropped unexpectedly in August. The country's Purchasing Managers' Index dropped by 2.7 to seasonally-adjusted 49.5 points down from August's reading of 52.2. The figure was below the expected 51.8 points and also below the 50-points threshold, meaning that the sector is experiencing a contraction where it has been for most of 2015. At the same time, the output gauge plummeted to 49.1 points in September, down from 62.4 points in the prior month. As to the Purchase Price Index, it slid to 35.1 points in September down from August's 36.1 points.
The existing pressure on the Swiss manufacturing sector is likely to persist, as the appreciating Franc puts more pressure on manufacturer's profitability, thus forcing companies to raise prices and cut costs, in order to mitigate losses. Meanwhile, the country's retail sales surprisingly slipped in August by 0.3% on an annual basis. This figure did not match analysts' forecasts, as they projected an increase of 0.3% after July's 0.1% growth.
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