* Swiss PMI rises for first time since November 2007 to 34.7
* Economists see signs that downturn nearing bottom
* Corporate bankruptcies rise 18 percent y/y in April
(Adds details on corporate bankruptcies)
By Sven Egenter
ZURICH, May 4 (Reuters) - Switzerland's Purchasing Managers' Index rose for the first time in over a year in April, offering a first sign that a steep drop in manufacturing may be nearing a bottom.
The Credit Suisse/SVME purchasing managers' index rose to 34.7 from a record low of 32.6 in March, Credit Suisse said on Monday, and was above the median forecast in a Reuters poll of economists at 33.8.
"This is the first increase for 16 months (November 2007)," Credit Suisse said in a statement. "A look at the PMI's components also finds signs that a floor is gradually building.
"With the exception of employment, all of the subcomponents rose over the month, even though all five still remain below the 50-point threshold," it said.
Analysts said the Swiss PMI, which is based on a survey of manufacturers, was finally following other European indicators such as the euro zone PMI. This hit a six-month high in April, although it also remained far below the 50 mark which separates growth from contraction.
"The maximum speed of the decline is behind us," Sarasin analyst Jan Poser said. "The downturn loses momentum. That provides some glimmers of hope."
The global recession has hit the export-oriented Swiss economy hard and the Swiss National Bank forecasts the economy will contract by up to 3 percent, which would be the worst recession since 1975.
Debt consultancy Creditreform reported an 18 percent year-on-year rise in corporate bankruptcies in April. "The number of bankruptcies can be expected to hit a new record of more than 5,000 in 2009 given the economic environment," the consultancy said.
DEFLATION
The central bank has taken drastic steps to fight the risk of deflation. The SNB cut its target for the 3-month Swiss franc LIBOR to a record low of 0.25 percent, intervened in the foreign exchange market to stem the rise in the franc and started buying corporate bonds.
The PMI survey showed that companies were still being forced to reduce prices sharply. The indicator for purchasing prices fell again, staying close to the record low hit in February.
The sharp drop in producer and import prices has already fed through to consumer prices, which fell 0.4 percent in March, posting the biggest year-on-year fall in 50 years.
Economists expect the central bank to stick to its ultra-lose monetary policy for quite some time.
"The SNB is likely to keep interest rates near zero for most of 2009/2010," 4Cast analyst Saara Tuuli said.
Manufacturers and banks have been hard hit by the economic slump, but domestic sectors such as retailers and the tourism industry have held up better as consumers have kept spending up.
However, the PMI survey indicated that unemployment should rise at a faster speed over the next few months as the indicator for employment dropped to a fresh record low at 31.9 points. (Reporting by Sven Egenter, editing by David Stamp)