Zurich (AWP) – Morals of manufacturers in Switzerland has improved significantly in June, reconnecting with its levels of the start of the year, before customs duties by Washington. On the side of services, however, confidence has dropped.
The purchase directors’ index (PMI) in the Disagreement Industry compiled by the Cabinet Procure.ch and commented by UBS, jumped 7.5 points last month compared to May at 49.6 points, approaching its growth threshold of 50 points, can be read in a statement released on Tuesday.
In the service sector, the PMI has dropped 7.7 points to stand at 48.5 points, retreating below the growth threshold of 50 points for the first time since July 2024.
These figures differ very clearly from the anticipations of economists. The latter provided for a PMI, corrected for seasonal variations, between 43.5 and 45.4 points in industry and from 51.0 to 53.8 points in the services.
In the industry, the order components of orders, production and employment supported the index, improving 14.5 points respectively, 7.3 points and 4.1 points, to stand at 50.4 points, 49.7 points and 47.7 points. On the other hand, the stocks of raw materials (40.1 points) and finished products (42.7 points) remained stable at low levels, due to destocking initiated in May 2023. The delivery times at the same time increased by (+4.6 to 56.4 points). Purchasing prices tend to drop (-1.3 to 47.1 points).
“It remains to be seen whether this takeover will be sustainable. Geopolitical and commercial risks remain high, given the expiration in July of the suspensions of new customs duties decided by the American administration,” wrote the experts of the Bank to the three keys.
Usual fluctuations
On the side of the services, the net withdraws, which comes after a strong progression in May, does not overly worry economists. “Strong fluctuations in the indicator are not unusual” and the indicator remains relatively stable over a three -month mobile average.
The high rise in the component business activity in this segment, standing at more than 60 points in May, will not have lasted, retreating to 52 points in June. The situation of orders has particularly deteriorated, the new orders having dropped from 8.8 points to 47.2, and the order books from 10.6 points to 46.5. The employment component remained relatively solid at 48.9 points.
A positive point was the evolution of the purchasing price component, which fell to its lowest level since November of last year, which should have somewhat reduced pressure on the beneficiary margins, notes UBS. Especially since the component of selling prices has only retreated marginally.
Dreaded protectionism
The share of industrial companies saying that is affected by the increase in protectionist measures in the past twelve months fell to 32% in June, against 35% previously. “Some purchasing managers have even reported a decrease in business obstacles”. On the other hand, the proportion of manufacturers who expect an increase in such measures in the next twelve months has increased from 50 to 60%.
In the services, only about one in six business has been affected by an increase in protectionist measures in the last twelve months – a little less than in May. However, the share of companies that expect an increase in the next twelve months increased from 29 to 36%.
The expiration next week of customs duties could intensify these concerns.
rr/lf
