Swiss and Swedish PMIs Slide Into Contraction, Underscoring European Slowdown

Fresh purchasing-manager surveys point to a sharper slowdown in parts of Northern Europe as both Switzerland and Sweden reported July readings below the 50-point mark that separates growth from contraction. In Switzerland the manufacturing PMI fell to 48.8, undershooting the consensus forecast of 49.9 and slipping further from June’s 49.6. The services gauge plunged to 41.8 from 48.5, its weakest level this year, highlighting a broadening downturn beyond factories. Sweden showed a similar pattern. Swedbank’s services PMI dropped to 48.8, well below the expected 54.0 and June’s 54.6, while the composite PMI eased to 50.3 from 51.5, indicating only marginal expansion in overall activity. The weaker data add to signs of soft demand across the continent. UBS, in a separate note, now expects euro-area output to grow by roughly 1% this year, cautioning that sluggish momentum and easing price pressures will test policymakers’ resolve in keeping interest rates on hold.