The UBS consumption indicator rose again in December. The higher number of hotel stays by Swiss residents drove the increase.

Zurich/Basel, January 30, 2013 – The UBS consumption indicator rose to 1.34 points in December from 1.23. The increase is mostly due to a greater number of hotel stays by Swiss residents. No improvement was reported in the retail industry, where business conditions still stagnate at a low level.

After an extended period, a slight positive trend can at last be seen in the demand for hotel stays by Swiss residents. Since the appreciation of the franc in 2008, the number of hotel stays by Swiss residents declined by just under 2% in Switzerland. The number of hotel stays by Swiss residents has risen again slightly since fall of last year. This nurtures the hope that the drop in demand for hotel stays by Swiss nationals has bottomed out and may now rise again.

The strong franc has made vacation abroad less expensive. For this reason the Swiss are enjoying their vacations more frequently abroad. Measured in Swiss francs, expenditures by Swiss tourists abroad have remained more or less constant since 2008, but due to the appreciation of the franc in recent years, the Swiss have been able to afford more for their money abroad. The stagnating hotel stays in Switzerland thus in no way indicate a decline in the appeal of travel for Swiss nationals.

However, many Swiss appear not to want to miss their winter vacation at home. The domestic demand for hotel stays has remained constant in the winter season since 2008. Only in the summer do the Swiss appear to favor less expensive vacation destinations abroad. Therefore, the drop in the domestic demand for hotel stays is solely caused by a decline during the summer months.

As already seen during the whole of 2012, new car registrations have had a supportive impact on the UBS consumption indicator. A total of around 328,000 new registrations were counted in 2012. After the record year 1989 with 335,000 new registrations, 2012 was thus the second-best year ever measured for new car registrations. Swiss car sales were supported by automobile prices some 15% lower compared to two years ago. The appreciation of the franc made automobile imports into Switzerland cheaper, and also put the prices of the domestic automobile providers under pressure.

How the UBS Consumption Indicator is calculated

The UBS Consumption Indicator signals private consumption trends in Switzerland with a lead time of about three months on 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.

UBS AG

Media contact

Caesar Lack, UBS CIO Wealth Management Research
Tel. +41 44 234 44 13, caesar.lack@ubs.com

Sibille Duss, UBS CIO Wealth Management Research
Tel. +41-44-235 69 54, sibille.duss@ubs.com


UBS publications and forecasts for Switzerland: www.ubs.com/wmr-swiss-research

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