Swiss PMI hits two-year high, price pressures emerge

* Swiss PMI rises to 57.4 pts in Feb, beats forecasts

* Price component hits highest since Aug 2008

ZURICH, March 1 (BestGrowthStock) – A recovery in Switzerland’s
manufacturing sector accelerated in February as a purchasing
managers’ index hits its highest level in nearly two years and
the first price pressures emerged, data showed on Monday.

The Swiss purchasing managers’ index rose to a seasonally
adjusted 57.4 points in February, from 56.0 points in January,
according to Credit Suisse, which publishes the PMI.

That was its highest level since March 2008 and beat even
the most optimistic analysts’ expectations.(ECONCH: )

“The numbers look really good. They fit our forecast of 2
percent economic growth for 2010,” said ZKB analyst David
Marmet, adding that the Swiss National Bank (SNB) would probably
have to raise its forecast of 0.5 percent to 1 percent.

The PMI’s price component shot up by seven points to 62.4
points, its highest level since August 2008, although analysts
expect the central bank to keep its target interest rate on hold
at just 0.25 percent at its policy review on March 11.

SNB Vice Chairman Thomas Jordan said in an interview on Feb.
21 that it was as yet too early to raise interest rates, though
policy would have to be tightened in the medium term.

ZKB analyst Marmet said the central bank had to balance the
strong economic recovery with the euro zone’s debt woes, which
are weighing on the euro.

“If the SNB raises rates too early the Swiss franc (EURCHF=: )
will rise further,” he said, adding that he expected the first
SNB rate hike in September.

The central bank has repeatedly intervened to curb the
franc’s appreciation and most economists expect the bank to
stick to its intervention policy for now.

However, the SNB was likely to emphasise rising price
pressures over the medium term at its meeting next week, further
shifting communication towards a tightening bias, Marmet said.

Credit Suisse said the PMI survey showed that companies have
started to restock their inventories.

“This can be attributed to burgeoning confidence, but
possibly also to fears about future price increases,” the Credit
Suisse analysts said in a statement.

Stock Today

(Reporting by Sven Egenter; Editing by Susan Fenton)

Swiss PMI hits two-year high, price pressures emerge