UBS consumption indicator: stabilization at a low level
After a sharp drop in summer, Swiss consumption stabilized in September.
The UBS consumption indicator rose by 0.04 points to 0.84 points in September, after falling sharply between June and August. The slight increase was due to the continued high number of new car registrations, which in September was 18.6 percent above the previous year’s level (August: 9.1 percent). Still disappointing is the situation in the retail industry, where, month-on-month, figures were down even further in September.
Swiss consumers are currently in two minds. On the one hand, they are concerned by the debt crisis in Europe and the United States, where there are signs that austerity measures could weaken global economic growth, something which would also hit the export-oriented Swiss economy. On the other hand, the setting of an exchange rate floor by the Swiss National Bank against the euro and the weakening of the franc has most likely dispelled the considerable uncertainty which influenced further economic development. At the same time, consumers are increasingly benefiting from the passing on of continued exchange rate gains, which increases their purchasing power. Consequently, we do not expect consumer sentiment to worsen further in future.
UBS Consumption Indicator and private consumption in Switzerland
(Private consumption: year-on-year change, in %; UBS Consumption Indicator: index level)
Calculation of the UBS Consumption Indicator
The UBS Consumption Indicator signals private consumption trends in Switzerland with a lead time of about three months of the official figures. At roughly 60%, private consumption is by far the most important component of Swiss GDP. UBS calculates this leading indicator from five consumer-related parameters: new car registrations, business activity in the retail sector, the number of domestic overnight hotel stays by Swiss residents the consumer sentiment index, and credit card transactions made via UBS at points of sale in Switzerland. With the exception of the consumer sentiment index, all of this data is available monthly.
Daniel Kalt, Chief Economist Switzerland
Tel. +41 44 234 25 60
Caesar Lack, Wealth Management Research
Tel. +41 44 234 44 13
Sibille Duss, Wealth Management Research
Tel. +41 44 235 69 54
UBS publications and forecasts for Switzerland