* Swiss PMI 56.5 in Nov vs 54.2 in Oct
* Analysts had forecast rise to 55.0 on average
* Index in expansion zone for eight consecutive month
* Demand recovering, but setbacks still possible - PMI authors
ZURICH, Dec 2 Well-stocked order books helped Switzerland's manufacturing activity expand for the eighth month in a row in November, a survey showed on Monday.
The Swiss purchasing managers' index, a snapshot of the health of the manufacturing sector, rose to a seasonally adjusted 56.5 points from 54.2 points in October, beating expectations for 55.0 points.
The PMI survey found order books were well filled and production continued to rise in November, and employers were adding to their headcount.
But the survey's authors cautioned that stocks of purchases and finished goods continued to fall, indicating a shorter turnaround time for goods and a trend towards more 'just in time production' as short-term orders rise.
"This makes it more difficult for industrial enterprises to plan investments, which is likely to result in weaker investment behaviour," said Swiss purchasing managers' association SVME and Swiss bank Credit Suisse, who compile the index.
"The present recovery should therefore prove weaker than what might be expected on the basis of demand."
Switzerland's economy is closely tied to that of the euro zone - its biggest trading partner - and exporters are hopeful that a brighter outlook for the single currency bloc will help drive demand for their goods.
Other recent data has suggested that the Swiss recovery will pick up steam in coming months. The country's leading indicator rose to it highest level since July 2011 in November.
The SNB, which holds its quarterly monetary policy assessment next week, expects the economy to grow between 1.5 and 2.0 percent this year. (Reporting by Caroline Copley; editing by Patrick Graham)