UBS Consumption Indicator: Steep rise in March
The UBS Consumption Indicator rises steeply in March, confirming UBSs optimistic outlook for the economy.
The UBS Consumption Indicator rose considerably in March. From its February level of 1.20, it increased to a value of 1.71 in March. The Consumption Indicator thus returned to its pre-crisis level of the summer of 2008. The steep rise in the Consumption Indicator indicates an acceleration of consumption growth and confirms UBS's optimistic economic outlook. UBS expects economic growth of 2.5% for this year.
The UBS Consumption Indicator is based on five sub-indicators: new car registrations, business activity in the retail sector, the number of overnight stays in domestic hotels by Swiss nationals, the consumer sentiment index, and credit card transactions processed by UBS at points of sale in Switzerland.
The rise in the Consumption Indicator is primarily attributable to growth in new car registrations: In March, a total of 28,354 new cars were registered, corresponding to an increase of 20% on the previous year. The last time so many new cars were registered was in the summer of 2008. As well as the boom in new car registrations, the high demand for overnight stays in hotels also contributed to the rise in the Consumption Indicator only in 2007 were more February overnight stays in hotels by Swiss nationals recorded than during this February.
The expected improvement in consumer sentiment and business activity in the retail sector should mean that the Consumption Indicator will rise further in coming months.
UBS Consumption Indicator and private consumption in Switzerland
(Private consumption: year-over-year change, in %, UBS Consumption Indicator: index level)
Caesar Lack, Economic Research Switzerland
Tel. +41 44 234 44 13
Hans-Peter Hausheer, Economic Research
Tel. +41 44 234 67 32
UBS publications and forecasts for Switzerland: www.ubs.com/wmr-swiss-research