UBS Consumption Indicator: Subdued private consumption in 2017 despite solid November figures
The UBS Consumption Indicator climbed to 1.43 points in November from 1.39. Another strong month in domestic tourism and the positive trend on the automobile market made the rise possible. Initially a solid start is to be expected for 2017, but momentum is expected to subside.
Zurich, 28 December 2016 – The UBS Consumption Indicator rose to 1.43 points in November from 1.39. As already seen in prior months, the rise is due mainly to domestic tourism. According to the latest available figures, Swiss tourists provided for a happy ending to the summer season with an increase in the number of hotel stays in October of 4.9% year-on-year. Besides domestic tourism, the Swiss automobile market also blossomed in the end. The increase in new vehicle registrations by 0.4% compared to the already strong same month last year presented car dealers with a golden November.
The current value of 1.43 points lies within the long-term average, which indicates solid growth for the coming months. However, private consumption is likely to grow less robustly over the coming year in general. After employment in the third quarter did not decline, the situation on the labor market in 2017 should relax. Nevertheless, it is to be expected that braking effects will predominate. The impacts of the collapse in oil prices at the start of this year and the aftermath of last year's exchange rate shock will subside, and for the first time since 2011 inflation could again be positive. The associated drops in purchasing power and the structural challenges of the retail trade may well obstruct dynamic development of private consumption in the coming year.
UBS Switzerland AG
Sibille Duss, UBS Chief Investment Office WM
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Alessandro Bee, UBS Chief Investment Office WM
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