Switzerland’s manufacturing PMI for July is at 48.8, according to Procure’s report on August 4, 2025. This number is below the expected 49.7 and follows a previous reading of 49.6. The PMI has been below the important 50.0 mark since January 2023, indicating that the sector is shrinking. New orders have dropped significantly this month, adding to the challenges.

Manufacturing Challenges

Production output is at 49.6, showing a slight decline as it remains just below the growth level. This trend emphasizes the ongoing struggles within Switzerland’s manufacturing sector. The Swiss manufacturing industry is weaker than we anticipated, continuing a negative pattern that started in early 2023. This new data shows a significant drop in new orders, which is concerning for future production. This surprise could lead to a decrease in the Swiss franc’s value against other currencies in the short term. These disappointing economic results put more pressure on the Swiss National Bank to respond. With inflation cooling to 1.6% as of July 2025 and rate cuts happening in March and June, this report makes it likely that another cut will happen in September. Traders might want to prepare for a weaker franc by considering long positions in currency pairs like EUR/CHF or USD/CHF.

Impact on Swiss Companies

The falling new orders will affect the earnings outlook for major Swiss industrial firms listed on the SMI index. Many of these companies rely on foreign demand, which seems to be declining. As a result, traders may increase their bearish bets on Swiss stocks by using put options or shorting specific manufacturing shares. This issue isn’t unique to Switzerland; Germany’s manufacturing sector, a key trading partner, is also showing signs of weakness. This situation is reminiscent of the prolonged industrial slowdown after the 2008 crisis, which prompted significant policy changes from the central bank. The fact that the sector has been contracting for over two and a half years suggests that it is a structural issue, not just a temporary downturn. Create your live VT Markets account and start trading now.

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