UBS consumption indicator: offsetting indicators prompt sideways shuffle
The UBS consumption indicator shifted sideways in March. Higher domestic demand for hotel accommodations offset the decline in new car registrations and a poorer climate in retail trade.
Zurich/Basel, 24 April 2013 – The UBS consumption indicator rose minimally in March month-on-month to 1.25 from 1.24 (revised from 1.26). Positive signs in the demand for hotel accommodations among Swiss residents offset a decline in new car registrations and a poorer business climate in retail trade.
Prime snow conditions made skiing vacations more attractive: In the winter months, the number of overnight hotel stays by Swiss residents rose 1% in Switzerland compared to the previous year. This fuels hope that things in the Swiss tourism industry could improve somewhat in the current year after a bad year in 2012. The poor situation in the tourism industry, however, has scarcely dented the prices for overnight stays: According to the Swiss consumer price index from the Federal Office of Statistics, prices for overnight stays have fallen only 0.8% in the past 12 months. Hotel prices thus developed in more or less the same way as the entire Swiss consumer price index, which declined 0.6% in the same time period.
After starting the year by exceeding expectations, new car registrations collapsed in March. With 12.1% fewer new registrations for the month year-on-year, the automotive market appears to be heading quite exactly toward the 10% decline for the full year 2013 expected by car importers at the beginning of the year. Figures for the business climate in retail trade were disappointing. After a slightly positive trend in recent months, the situation deteriorated again clearly in March.
How the UBS Consumption Indicator is calculated
The UBS Consumption Indicator signals private consumption trends in Switzerland with a lead time of about three months on the official figures. At roughly 60%, private consumption is by far the most important component of Swiss GDP. UBS calculates this leading indicator from five 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, and credit card transactions made via UBS at points of sale in Switzerland. With the exception of the consumer sentiment index, all of this data is available monthly.
Daniel Kalt, UBS Chief Economist Switzerland
Phone +41-44-234 25 60, firstname.lastname@example.org
Bernd Aumann, UBS CIO Wealth Management Research
Tel. +41-44-234 88 71, email@example.com
Sibille Duss, UBS CIO Wealth Management Research
Tel. +41-44-235 69 54, firstname.lastname@example.org
UBS publications and forecasts for Switzerland: www.ubs.com/wmr-swiss-research
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