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KOF Economic Barometer, July: Remains Practically Unchanged

The KOF Economic Barometer only slightly moved in July. Compared to its June value, it decreased by 0.2 to 101.1 points. The current Barometer value still stands slightly above the long-term average of 100 points; it thus indicates a slightly above-average economic development in Switzerland in the coming months.

In July, the KOF Economic Barometer fell slightly to 101.1 points from 101.3 in June (101.7 in the initial publication in June). Negative indicators for manufacturing, the export industry and the accommodation and food service activities sector were mainly responsible for the slight decrease. Positive signals come from the banking and the construction sectors.

In the goods producing sectors (manufacturing and construction), the indicators of employment, business situation, production, barriers and capacities point to a positive development. They are counterbalanced by the negative outlook for orders, the competitive situation, intermediate goods, earnings and exports. Overall, the positive and negative indicators more or less balance each other out.

The overall negative contribution of the manufacturing sector to the overall Barometer is due to the gloomier prospects in the chemical, paper and metal industries. The indicators for the food, wood and electrical industries have developed positively.

KOF Economic Barometer, July 2018

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KOF Economic Barometer, July 2018

Source: - Click to enlarge

KOF Economic Barometer and reference time series: annual update

In September 2017, the scheduled annual update of the KOF Economic Barometer took place. The annual update of the Barometer concerns the following steps: redefinition of the pool of indicators that enter the selection procedure, update of the reference time series and renewed execution of the variable selection procedure. The updated reference series is the smoothed continuous growth rate of the Swiss Gross Domestic Product (GDP) according to the new System of National Accounts ESVG 2010, released in early September 2017, which takes into account the release of the previous year’s annual GDP data by the Swiss Federal Statistical Office. As a result of the indicator variable selection procedure, the updated KOF Economic Barometer is now based on 273 indicators (instead of 272 as in the previous vintage) from a pool of almost 500 potential indicator series. They are combined using statistically determined weights.

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KOF Zurich
KOF Swiss Economic Institute defines itself as one of the leading economic “think tanks” in Switzerland. In this prospect, KOF (acronym for the German word "Konjunkturforschungsstelle", which means business cycle research institute) aims to play two roles, one as a mediator between a broader public (politics, society) and the research community, and one as a leading platform for economists, especially within Switzerland.
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