UBS Consumption Indicator: new car registrations drive increase in March
Strongest February in 10 years for new car registrations does not compensate slump in retail business
In March, the UBS Consumption Indicator gained 0.21 points over the previous month. This recouped the decline recorded in February. At 1.66 points, the indicator lies at the same level as in January. With a value 5.6% higher than in the same month in the previous year, new car registrations were the main driver of the increase (up 34.3% compared to the previous month). This was the highest number of car registrations recorded in March since 2001. The trend in overnight stays of domestic visitors saw a reversal. The upward tack evident since last fall could not be confirmed. Particularly mountainous regions experienced substantial declines year-on-year, possibly attributable to poor snow conditions.
The UBS Consumption Indicator enables direct comparison with the growth rate of private consumption in the previous year. At 1.66 points, the index is slightly above our expectation of 1.6% for inflation-adjusted private consumption in 2011. Low interest rates, improvements in the labor market and ongoing immigration continue as pillars of private consumption and the broader economy. UBS Economic Research Switzerland remains positive on the development of the economy as a whole and anticipates 2.7% growth in the Swiss gross domestic product this year. While investments are the main growth drivers, private consumption also represents an important mainstay.
The UBS Consumption Indicator is calculated on the basis of five sub-indicators: new car registrations, business activity in the retail sector, the number of domestic overnight stays in hotels by Swiss residents, the consumer sentiment index, and credit card transactions via UBS at points of sale in Switzerland.
UBS Consumption Indicator and private consumption in Switzerland
(Private consumption: year-on-year change, in %; UBS Consumption Indicator: index level)
Daniel Kalt, Economic Research Schweiz
Tel. +41 44 234 25 60
Elias Hafner, Economic Research Schweiz
Tel. +41 44 234 77 94
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