UBS consumption indicator: Christmas trade lifts mood in retail sector
Retailers consider November business conditions to be much better than in the previous month, raising the UBS consumption indicator.
Zurich/Basel, 23 December 2013 – The UBS consumption indicator climbed to 1.43 index points in November from 1.26. This rise was due to a higher assessment of business conditions in the retail sector, although weaker figures for new car registrations prevented a steeper increase.
The index for business conditions in the retail trade is compiled by the Swiss economic research institute KOF at the Institute of Technology in Zurich and constitutes one of five sub-indicators in the UBS consumption indicator. It rose to 6 index points in November from -1.5. With the Christmas trade going well, retailers can forget their concerns about margin pressure and the strength of the franc, at least in the near term. Consumers' budgets are less tight due to the improving economic outlook. According to a survey by auditing and consulting firm Deloitte, Swiss households intend to spend an average of CHF 807 on Christmas presents this year, 3% more than last year. The increase was even higher when also taking the decline in prices into consideration.
Car sales, on the other hand, are not benefiting from the pre-Christmas spending boom. New registrations fell 7% in November compared with the previous month on a seasonally adjusted basis. Cumulatively, 7% fewer new cars have been registered so far this year compared with last year.
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, firstname.lastname@example.org
Bernd Aumann, UBS CIO Wealth Management Research
Tel. +41-44-234 88 71, email@example.com
UBS publications and forecasts for Switzerland: www.ubs.com/wmr-swiss-research