(15.11.2023) Strong headwinds are blowing across the Swiss economic landscape. In October, Raiffeisen's PMI SME index dropped by nearly five points to 45.2. The banking institution highlights the industrial recession in the Eurozone and the appreciation of the franc.
The index recorded its lowest level since spring 2021. In October 2023, the "production" component (-10.7 points / 42.5) and "order books" (-8.3 points / 43.6 points) experienced the most significant declines. The study authors are particularly concerned about the weakness in order volumes, often a harbinger of a production slowdown in the coming months.
Furthermore, the global economic situation, characterized by high inflation and elevated interest rates, could further impact the Swiss industry. Employment remains relatively resilient, but its component within the PMI SME index contracted by 3.3 points, reaching 48.6, just below the growth threshold. Conversely, commodity stocks strengthened (+5.7 points / 50.7) and are now in the growth zone.
Many surveyed companies express concerns about the strength of the franc, which has been appreciating steadily for over two years, and its negative impact on exports. Currently, the franc's appreciation, especially against the euro, is offset by the fact that inflation is faster in the Eurozone than in Switzerland. However, given the escalating tensions in the Middle East, international investors could once again flock to stability havens like Switzerland, suggesting a further strengthening of the franc in international markets.
Last modification 15.11.2023
