UBS consumption indicator: significant increase in June
Boosted by better retail trade sentiment and signs of recovery in Swiss tourism, the UBS consumption indicator rose noticeably in June.
Zurich/Basel, 30 July 2014 – The UBS consumption indicator climbed to 2.06 points in June from 1.80. The indicator recorded an average of 1.85 points in the second quarter. This indicates accelerated growth in private consumption compared with the first quarter, when the rise was a modest 1.2% over the previous year.
Business activity in the retail sector, as surveyed by the Swiss Economic Institute (KOF) and included as one of five sub-indicators in the calculation of the UBS consumption indicator, continued its upward trend in June. At 19 points, the index reached its highest value since January 2009.
There were similar positive developments in the number of overnight hotel stays by Swiss residents in the first half of the year. In the first five months this number rose by 18,000 or 0.3% compared with the same period in the previous year. Last year's tentative recovery in the domestic tourism industry has thus continued. Nonetheless, the number of overnight hotel stays by Swiss residents is still not close to the level before the slump in 2008.
Only new car registrations clouded the private consumption picture. The automobile trade continued its negative trend, recording a seasonally adjusted 2% fewer new cars in June than in the previous month. In the first six months 4% fewer automobiles were registered than in the same period of the previous year.
Sources: Seco, UBS
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.
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