PMI – procure.ch

PMI (Purchasing Managers’ Index)

The Swiss PMI (Purchasing Managers’ Index) was created in January 1995. It is a collaborative effort between CREDIT SUISSE and procure.ch.

This forward-looking index provides a monthly update on economic trends and serves management as a practical aid for strategic planning. Analysts value the PMI Industry for its forecasts, as demonstrated by the following links to press clippings:

Current PMI results (buyer index), data and market trends

Simple PMI concept proven worldwide

The PMI concept is simple and has been implemented successfully in the United States for more than 50 years. The basis for the Swiss PMI Industry and Service indices is provided by over 300 purchasing managers who deliver their monthly data using a standardised online questionnaire. The data indicates how the current month’s performance has changed compared to the previous month. The questions are qualitative, i.e. the purchasing managers evaluate whether the level of activity is higher, the same or lower than the month before. Credit Suisse Economic Research comments on and analyses the aggregated responses.

The questionnaire covers the following topics:

PMI Industry (manufacturers)

  • Production/output
  • Order volume (customer orders)
  • Purchasing volume
  • Purchasing prices
  • Delivery dates (longer, same, shorter)
  • Backlogged merchandise (as a list)
  • Inventory of purchased raw materials, semi-finished goods, components
  • Inventory of finished goods
  • Number of employees

PMI Service (service and trading companies)

  • Business activity
  • New orders
  • Order volume (customer orders)
  • Purchasing prices
  • Sales prices
  • Number of employees

Which companies are part of the service sector?

The service sector includes companies that generate more than half of their revenues from the provision of services. Service providers trade in goods or provide services directly to customers (consulting, management, development, etc.). It is not always easy to determine a company’s category, but procure.ch is happy to provide assistance.

Participating in the PMI survey

If you are a purchasing manager in an industrial, service or trading company, you are always welcome to contribute your data to the Purchasing Managers’ Index. Filling out the PMI questionnaire only requires approximately 15 minutes per month. As a survey participant, you will receive an immediate summary of all of the results and can incorporate them into your own analyses.

VIP panel meeting of the Purchasing Managers' Index PMI

Purchasing managers and business analysts work hand in hand each month to prepare the Purchasing Managers' Industry and Service indices – but on an anonymous basis. Hosted by procure.ch and Credit Suisse at the Forum St. Peter in Zurich, the annual VIP meeting offers a chance for personal contact.

PMI: a weighted index

The resulting indices from procure.ch measure the speed and direction of change for each observed activity. However, the most attention is given to the actual PMI, which was developed in 1982 by Theodore Torda, an economist at the US Department of Trade. The PMI is a weighted index made up of five of the eight indices (weighting in brackets): order volume (0.3), production (0.25), employment (0.2), delivery times (0.15) and purchased inventory (0.1).

Seasonal adjustment

Many of the observed indices display distinctive seasonal patterns that are due to seasonal weather influences, social factors, differing numbers of work days, or holidays in the individual months. Only seasonally adjusted indices are meaningful for evaluating economic trends. The seasonal adjustment of the Purchasing Managers’ Index is calculated indirectly through the seasonal adjustment of the sub-indices, following the model of the American National Association of Purchasing Management. For the adjustment of the time series, seasonal factors for each month are recorded and modify the corresponding original values, resulting in the seasonally adjusted data.