Swiss industrial activity peaks
Industrial activity in Switzerland peaked in the third quarter. The latest UBS survey shows that Swiss companies expect growth to slow slightly in the final three months of the year but remain at a high level.
The results of UBS's quarterly survey of around 330 Swiss industrial firms in September show that the expectations expressed last quarter were clearly exceeded. Business activity strengthened again in the third quarter and reached a level last witnessed during the boom phase in 2000. This suggests that industrial activity has peaked in Switzerland, although the companies surveyed expect only a slight dip in the final quarter of this year.
UBS Business Cycle Indicator flattening out at high level
Robust industrial activity is making itself felt throughout the Swiss economy. The UBS Business Cycle Indicator, which is derived from the results of the quarterly survey, indicates continued strong growth in real GDP. Although the indicator is set to gradually flatten, it will still reach approximately 3% in the current quarter as well.
Employment levels boosted in third quarter
New orders, production, backlogs and sales saw faster growth in the third quarter at the industrial companies surveyed. Exports continued to provide a strong impetus. Employment levels climbed further on the back of rising capacity utilization which, at 89.4%, was exceptionally high. Headcount increased at 35% of firms and decreased at only 15%. This trend will probably become even more pronounced in the current quarter. Sales prices increased and almost half the firms surveyed reported higher earnings.
Sectors remain optimistic, although there are some differences
Although momentum is dropping off slightly, companies are clearly upbeat about the final quarter of this year in all criteria surveyed. The same is true in a cross-sector picture, although there are slight differences. Watchmakers are once again the most optimistic sector, and the metals and electrical engineering sectors are also expecting business to be above average. Textile firms and printing and graphics companies are slightly less optimistic compared with the cross-sector average.
UBS publications and forecasts for Switzerland:
UBS Business Cycle Indicator and gross domestic product
(Change yoy in %)
Data (in %):
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