The UBS consumption indicator sank from 2.07 to 1.66 points in July. The decrease is based on the development of most of the sub-indicators. Only new vehicle registrations rose in July, preventing an even stronger drop in the UBS consumption indicator.

Consumer sentiment, recorded by the State Secretariat for Economic Affairs (SECO) as one of the five sub indicators included in the calculation of the UBS consumption indicator, was slightly weaker in July. The index sank from 1 to -1 points. Sentiment thus remains above the long standing average of -9 points and only just behind the previously achieved three-year high. The indicator is influenced by two opposing assessments. On one hand, households anticipate their future economic and financial situation to be worse. On the other, as more consumers assume an improvement to the labor market, along with higher prices, they consider the present time favorable for larger purchases, including cars.

Retail business incurred the end to an upward trend – of several months – in business development. The index from the Swiss Economic Institute (KOF) fell to 10 points from 19. The registration of new vehicles was surprisingly strong, in contrast. Since 2000, there have never been so many new vehicle registrations in the month of July as in the current year. Seasonally adjusted, 26% more new vehicles were registered than in the previous month. This broke the negative trend in new vehicle registrations for the first time since 2012.

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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Media contact

Bernd Aumann, UBS Chief Investment Office WM
Tel. +41 44 234 88 71, bernd.aumann@ubs.com

Sibille Duss, UBS Chief Investment Office WM
Tel. +41 44 235 69 54, sibille.duss@ubs.com

 

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