Switzerland’s manufacturing PMI for July stands at 48.8, as reported by Procure on 4 August 2025. This figure is below the anticipated 49.7 and follows a prior reading of 49.6.
The PMI has been under the key 50.0 threshold since January 2023, reflecting a contraction in the sector. New orders saw a notable decline for the month, contributing to the downturn.
Manufacturing Challenges
The production output remains at 49.6, representing a minor contraction, as it remains just under the growth territory. This trend highlights the ongoing challenges within Switzerland’s manufacturing industry.
The Swiss manufacturing sector is showing more weakness than we thought, continuing a negative trend we’ve seen since early 2023. This fresh data shows a notable drop in new orders, which is a bad sign for future production. This surprise will likely push the Swiss franc lower against other currencies in the immediate term.
This poor economic reading puts more pressure on the Swiss National Bank to act. With inflation having cooled to 1.6% as of July 2025, and after the rate cuts we saw in March and June, this report makes another cut in September highly probable. Traders should anticipate this by positioning for a weaker franc, possibly by favoring long positions in currency pairs like EUR/CHF or USD/CHF.
Impact on Swiss Companies
The weakness in new orders will directly impact the earnings outlook for major Swiss industrial companies listed on the SMI index. Many of these firms depend heavily on foreign demand, which appears to be shrinking. Consequently, we can expect traders to increase their bearish bets on Swiss stocks through put options or by shorting specific manufacturing shares.
This isn’t an isolated issue, as we see similar sluggishness in Germany’s manufacturing sector, a key trading partner for Switzerland. This reminds us of the extended industrial weakness after the 2008 crisis, which forced the central bank into major policy moves. The fact that the sector has now been contracting for over two and a half years suggests this is a structural problem, not a temporary slump.
