Switzerland UBS Consumption Indicator May: Rising from a low level

The UBS Consumption Indicator rose to 1.35 points in May from 1.24, extending its positive month-on-month run. The indicator was, however, adversely affected by the recently released employment figures for 1Q 2016.

Zurich, 29 June 2016 – The UBS Consumption Indicator’s rise to 1.35 in May from 1.24 points represents a month-on-month improvement, albeit one measured from a lower level. The April figures were revised down to 1.24 points from 1.47 points, in response to weaker than expected employment figures in the first quarter of 2016. This represented the first decline in employment since 2010 (–0.2 percent year-on-year). Most of the decrease was attributable to lower employment in the industrial sector. Employment increased slightly in the service industry, however.

Private consumption sent a positive signal, increasing 2.8 percent on an annualized basis in the first quarter. It thus expanded much faster than in the previous quarter, and supported Swiss economic growth. Private consumption should remain a pillar of Swiss growth for the remainder of the year, but appears unlikely to repeat its first quarter performance. A more dynamic development will probably be held back by sluggish employment growth, declining immigration and rather pessimistic consumer sentiment, as indicated by surveys conducted by the State Secretariat for Economic Affairs.

Quelle: Seco, UBS

How the UBS Consumption Indicator is calculated
The UBS Consumption Indicator signals private consumption trends in Switzerland with a lead time of one to three months on the official figures. At more than 50%, private consumption is by far the most important component of Swiss GDP. UBS calculates this leading indicator from six consumer-related parameters: new car registrations, business activity in the retail sector, the number of domestic overnight hotel stays by Swiss residents, the consumer sentiment index, employment figures and credit card transactions made via UBS at points of sale in Switzerland. With the exception of the consumer sentiment index and employment figures, all of this data is available monthly.