UBS Consumption Indicator: Automobile market with record year-end results
The UBS consumption indicator rose from 1.45 to 1.50 points in December. The positive trend of last fall continued and signalizes solid growth prospects for private consumption this year. New car registrations in the automobile sector, which are at an all-time high, are at the root of this positive outlook.
Zurich, 25 January 2017 – The UBS consumption indicator rose from 1.45 to 1.50 points in December due primarily to the strong year-end results of the Swiss automobile sector. Compared with the previous December, new car registrations were up by 8.2%. The mood in the retail sector remains pessimistic, though. Domestic tourism managed to maintain its robust November showing. Compared with December 2015, the number of overnight hotel stays rose 0.9%.
Following a relatively sluggish start to the winter season due to the lack of snow, hopes for a good winter have since grown thanks to the major snowfalls before the start of the sports holiday season. Nevertheless, a long-term recovery of the Swiss tourism sector is not expected. The negative effects of the strong Swiss franc and the associated disadvantages vis-à-vis European competitors are simply too great. There is some light at the end of the tunnel, though. In many areas the sector is expanding its traditional winter tourist offerings to include alternatives like ice fishing. Furthermore, a weaker Swiss franc, which UBS is predicting for the next 12 months significantly above EURCHF 1.10, should boost Swiss tourism.
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Sibille Duss, UBS Chief Investment Office WM
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Alessandro Bee, UBS Chief Investment Office WM
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