Zurich, 07 June 2018 – From January to April 2018, the barometer of small and medium-sized enterprises rose from 0.50 to 1.14 points. In the same period, the barometer of large companies also increased to 1.14 points, from a previous level of 0.80. Both barometers thus reached levels far above the long-term average of 0 points. The two indicators had last reached a similarly high level in 2011. This was before the Swiss franc surged in value by 22% against the euro. The current barometer levels appear to indicate that both large companies and SME have finally overcome the shock caused by the Swiss franc.

Better business situation in the building sector

In the building sector and for architecture and engineering firms, the economic situation has recently improved for both groups of companies. As in the past months, the building sector's figures concerning the general evaluation of the business situation, while other indicators diverged. Profits have continued to drop, and no recovery is in sight as far as prices are concerned. Among architecture and engineering firms, the differences between the individual indicators were more significant between SME and the large companies. While large companies experienced stagnating demand in April, SME recorded an increase. Moreover, while SME complained about a lack of workers, large companies felt that the employment level was just right.

In the service sector, both groups of companies are still pleased with the business situation in the second quarter. Following a relatively weaker start into the year, large companies recorded increasing momentum. They achieved better results with respect to most of the indicators, such as the demand and the return. Only with respect to the evaluation of the future price behavior, the SME were slightly more optimistic, though both expected the prices to sink.

Large gaps in retail and tourism

The gap between SME and large companies was especially marked among retailers. While the large companies saw improvements in all subindicators, SME said that the economic setting has become more challenging. The weaker Swiss franc against the euro relaxed the tension in large companies more significantly than in SME. The picture was similar in the tourism sector, in which large companies boasted a much better economic situation than SME. In the second quarter, for example, the latter were still struggling with dwindling returns, which large companies have seen their income rising over the past one and a half years.

UBS SME barometer

Source: KOF, UBS

Calculation of the UBS SME barometer
The UBS Industrial Barometer is based on the industry survey conducted by the KOF each month (excluding the construction industry). It is calculated as the first main component of 17 subindicators for the entire industry, divided into SMEs (up to 200 employees) and large companies (more than 200 employees). It is scaled so that its mean value is zero and its variance is 1.

Industry

Services

Important 
The data is seasonally adjusted. Survey responses are evaluated using a diffusion index: the result represents average of companies reporting a positive or a negative trend. It therefore does not represent a percentage rate of change. 

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UBS publications and forecasts for Switzerland: www.ubs.com/investmentviews


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Sibille Duss, UBS Chief Investment Office WM
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