The monthly UBS Consumption Indicator dropped to 1.62 in April after reaching 1.76 in March. Despite this moderate loss, the index remains at a high level, and is still clearly above the February value of 1.37.

The UBS Consumption Indicator is calculated on the basis of five sub-indicators that, with the exception of consumer sentiment, are usually available very promptly every month. The decline seen in April was due primarily to slower growth in new car registrations, which fell by 14.3% compared to the same month in the previous year. Business activity in the retail sector also cooled slightly. The consumer sentiment index had a positive impact in April, as did the monthly number of domestic hotel overnight stays by Swiss nationals. The fifth sub-indicator used to calculate the UBS Consumption Indicator incorporates credit card transactions made via UBS at points of sale in Switzerland.

Despite the moderate decline in the Consumption Indicator, UBS's economists expect private consumption to remain robust. The most important factor underpinning this view is the recovery in the labour market, which is gathering pace. The seasonally adjusted unemployment rate for the last twelve months has fallen steadily from 3.8% to 3.4% in April. Surveys suggest a sustained increase in the need for recruitment among companies, and this is likely to be excellent news for household incomes. Unsurprisingly, the consumer sentiment index has gained further ground during the second quarter and is currently well above the long-term average. UBS's economists are therefore confident that private consumption will continue to provide important support to the economy.

UBS Consumption Indicator and private consumption in Switzerland
(Private consumption: year-on-year change in %, UBS Consumption Indicator: index level)