Less production volume and employment among Swiss SMEs

Small and medium-sized enterprises (SMEs) form the backbone of the Swiss economy: over 99 percent of all companies in Switzerland are SMEs. Over 67 percent of the local population works for an SME. But their business situation deteriorated in December.

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According to the Raiffeisen SME Purchasing Managers ‘Index (KMU-PMI), companies’ assessment of production volumes and employment in particular deteriorated in December. The SME PMI collected by Raiffeisen was 47.1 points in December. In the previous month it was still at 50.3 points.

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Poor job prospects

For the first time since the indicator started in December, in addition to the overall index, all subcomponents were below the 50 point mark, as Raiffeisen announced on Friday. The decline reflects the slowdown in industrial activity, the cooperative bank commented.

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The employment component in the SME PMI even fell to a new record low of 44.0 points. As a result, the weak economy in the manufacturing sector is leaving its mark on the labor market, says Raiffeisen. There is no sign of an immediate turnaround, as the order backlog has recently also declined.

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Contradictory indexes

The order backlog also declined in December, as did the assessment of the purchasing warehouse. Only the component of the delivery times was slightly improved, which, however, also fell well below the growth threshold at 45.6 points.

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According to Raiffeisen, around 200 companies are surveyed when surveying the SME PMI, which should be representative of all SMEs from Swiss industry. The industries metal, machinery, food, clocks and wood processing have the greatest weight. Together they contribute about two thirds to the business cycle indicator.

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The PMI for the overall economy calculated by Credit Suisse in cooperation with the industry association Procure.ch, which was also published on Friday, shows a somewhat different picture: it rose by 1.4 points to 50.2 points in December and was thus down just above the growth threshold. (SDA / gif)

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