The FINANCIAL — Switzerland’s manufacturing output increased in August, suggesting companies are managing to cope better with the strong franc and that demand for Swiss industrial goods is picking up in its key eurozone export market, according to Nasdaq.
The Swiss Purchasing Managers’ Index rose 3.5 points to a seasonally-adjusted 52.2 points from 48.7 points in July, data released on September 1 showed. The August reading was above an economists’ average forecast of 49.4.
The Swiss index climbed above the 50-point level, which signals growth in factory output, for the first time since the Swiss National Bank’s decision Jan. 15 to scrap the cap for the franc. The repeal of the cap sent the franc surging against the euro, the currency of Switzerland’s biggest export market.
The August PMI was driven by “an increase in production, with the corresponding subindex climbing to the highest level since December 2010,” said analysts at Credit Suisse Group AG, which co-compiled the index.
The latest PMI is also in line with the Swiss KOF leading economic indicator, a forecast for the development of the Swiss economy over a six-month period, which gained last month, beating expectations.
Zurich-based KOF said in June that the Alpine country’s economy could avoid a recession as long as the franc stays around or below 1.05 to the euro, but forecasts modest growth of just 0.4% this year.
The Swiss economy unexpectedly grew in the second quarter after shrinking in the first three months of the year, data released last week showed. The 0.2% growth was attributed largely to the robust private and government spending and on a slight recovery in the country balance of trade.