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UBS Consumption Indicator points to solid growth in consumption

| Media Releases Switzerland

The UBS Consumption Indicator rose marginally in May, consolidating the advance registered since its most recent low in February this year. It is signalling a slight acceleration in consumption growth from the second quarter onwards, and indicates that Swiss domestic demand is solid overall.

In May, the UBS Consumption Indicator stood at -0.147, compared with -0.154 in April and -1.329 in February. The indicator is therefore showing that consumption in Switzerland remains solid, and confirms the assessment of UBS economists that despite global economic uncertainty and higher oil prices, domestic demand will continue to support growth.

Varying trends in sub-indicators
Consumer sentiment, one of the sub-indicators that make up the consumption indicator, posted a further slight improvement in the most recent figures. In April and May, the business sentiment index for the retail trade also recovered from its first-quarter lows. The figures for the number of overnight hotel stays by Swiss domestic guests, a further component of the indicator, were for the first time prepared using new data from the Swiss Federal Statistical Office lodging statistics, which were resumed at the start of 2005. The number of overnight stays in hotels has stabilized, following a lengthy period of decline. The monthly figure for the number of new cars registered is currently sending out mixed signals regarding consumer behaviour in Switzerland. March and April appeared to show signs of stabilization in new car sales, putting an end to the steady downward trend since 2000. However, this was called into question to some extent by the sharper decline in sales during May. The fifth variable used to calculate the UBS Consumption Indicator is the monthly credit card turnover at points of sale within Switzerland that passes through UBS. Overall, the combined performance of the five indicators meant that the UBS Consumption Indicator consolidated at its April level.

Forecast of gradual pickup in growth remains unchanged
UBS continues to expect GDP to grow by 1.6% in real terms in 2005. In addition to the slight acceleration in the growth of private consumption highlighted by the UBS Consumption Indicator, exports will expand in the second quarter, triggering a revival in capital spending in the Swiss economy during the second half of this year.

UBS Consumption Indicator and private consumption in Switzerland
(Privat consumption: % changes year-on-year; UBS Consumption Indicator: level)

Zurich / Basel, 28 June 2005