The UBS consumption indicator climbed from 1.32 to 1.56 index points in September. This increase confirms our view that private consumption will continue to make strong gains and is an important pillar of the economy.

This year saw new car registrations record their second-best September figures in the past 10 years at 22,600. The number of new car registrations increased by 7% compared to the same month in the previous year. The automobile trade would nevertheless need a surge in sales during the fall to approach the record results of 2012. So far, cumulative new car registrations are 8% below last year's level. Contrary to the downward trend, new car registrations in the upper price range are holding up well, with a slight decline of only 1% compared to the same period last year, while the lower price segment posted a drop of 10%. We interpret this sustained strong demand for high-end cars as a positive sign for future economic performance, since it suggests that consumers have an optimistic outlook on the future.

Following a significant improvement in the retail industry in August, the positive trend continued in September. With the index at +6, the business situation in the retail trade has not been rated at this level since June 2011. Tourism also seems to have emerged from its trough; since the start of the year, 1.8% more overnight stays by Swiss nationals have been recorded, compared with the same period in the previous 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.

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Media contact

Caesar Lack, UBS CIO Wealth Management Research
Tel. +41 44 234 44 13, caesar.lack@ubs.com

Bernd Aumann, UBS CIO Wealth Management Research
Tel. +41-44-234 88 71, bernd.aumann@ubs.com

UBS publications and forecasts for Switzerland: www.ubs.com/wmr-swiss-research

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