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UBS consumption indicator: Consumer climate remains positive

Zurich/Basel | | Media Releases Switzerland | UBS News


The UBS consumption indicator rose slightly in May due to improved sentiment in the retail sector.

Zurich/Basel, 26 June 2013 – In May, the UBS consumption indicator rose slightly month-on-month to 1.46 from 1.43 (previously revised from 1.46). Nevertheless, the positive trend in retail sales was offset to some extent by the poor figures for new car registrations.

Sentiment in retail trade brightened considerable in May. The KOF barometer of business conditions in the retail industry, one of the five sub-indicators in the UBS consumption indicator, jumped to 1.0 from –10.5, cancelling the losses of the last two months. With this, the consumption indicator only just nudges into positive territory; in other words, there are still almost as many pessimists among retailers as optimists. Over the past three years, the strong franc and shopping tourism caused additional price pressure in the retail sector, resulting in a fall in prices of 7.2%. In the first months of this year, however, retail prices have barely fallen any further. In addition, sales in April rose sharply, with a nominal increase of 1.6% compared to the same month last year. This could be a sign that the effect of franc appreciation is gradually weakening. It also raises the hope that retail sales will at least stabilize and the pressure on margins will decline somewhat.

In contrast, new car registration figures in May were poor. While the number of new car registrations in April was only 1.5% lower than the figure for the same month in the previous year, the drop in May was much greater at 7.4%.

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.




Caesar Lack, UBS CIO Wealth Management Research
Tel. +41-44-234 44 13,

Bernd Aumann, UBS CIO Wealth Management Research
Tel. +41-44-234 88 71,

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