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Economic Indicators: In Switzerland and Germany the Euro Crisis Seems to Be Far Away

 Swiss vs. German Economic Indicators, August 2012

       Both Swiss and German economic indicators show continued signs of stability. Especially low unemployment, good retail sales and strong trade balances are signs of robustness. The German trade surplus has improved compared to last year, whereas the strong franc harmed the Swiss trade surplus just a bit. Probably thanks to the stronger franc and cheaper prices, retail sales were better in Switzerland than in Germany in recent months.


Manufacturing indicators are lower than last year after the Chinese and Southern European demand for cars, machines and equipment has calmed down. The Swiss SVME PMI is with 48.6 only a bit in contraction, whereas the German one shows 45.1, both over 10 points down compared to last year June.

Similarly as one year ago, Switzerland has outpaced Germany in terms of GDP growth this year.

Some divergences between private and state-based ones: The KOF leading indicator and the UBS consumption indicator are expanding, but the official SECO consumer climate is contracting. German consumer confidence is bigger than last year June. Apart from the PMIs and the IFO business expectations, for these two countries the euro crisis seems to be far.

Some people consider the Manufacturing PMI as the one most leading indicator, we do not. See our discussion with Chris Williamson from Markit and why we went long the euro on August 15 against USD and GBP.


Swiss & German Economic Indicators, August 2012

Swiss & German Economic Indicators, August 2012 - Click to enlarge

September update for Germany

German retail sales fell by 0.9% YoY in July. However the seasonally adjusted number (98.0) is still higher than the figures in February 2011 (97.7).


German Retail Sales seasonally adjusted

German Retail Sales seasonally adjusted - Click to enlarge

The German economy improves rather based on a higher trade surplus and a higher savings rates, after incomes moved higher.


Labor costs Germany Destatis

Labor costs Germany (source Destatis ) - Click to enlarge



Sources: all data on Daily FX, individual data on KOFSwiss Statistics, SECO, UBS.

Germany: Daily FX, Industrial production: Eurostat, Retail sales: Destatis, Labor costs:  Destatis 

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George Dorgan
George Dorgan (penname) predicted the end of the EUR/CHF peg at the CFA Society and at many occasions on and on this blog. Several Swiss and international financial advisors support the site. These firms aim to deliver independent advice from the often misleading mainstream of banks and asset managers. George is FinTech entrepreneur, financial author and alternative economist. He speak seven languages fluently.
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