Zurich/Basel, 25 March 2015 – In February, the registration of new cars climbed 13% compared to January (seasonally adjusted). However, registrations in the first two months of this year were 3% lower than in the same period last year. New car sales in January 2015 were significantly lower due to the higher carbon tax on automobile sales.

Reflecting the pessimism felt by most Swiss retailers, the consumer sentiment index fell from 4 to -4 points. The franc's strength after the removal of the floor is likely hurting retailers, many of whom have begun offering rebates and discounts to counter increased shopping tourism to neighboring countries. This may well please consumers, because their purchasing power thereby increases, but the ongoing price pressure will leave companies with no option but to lower their costs. This will likely lead to lower salary increases and higher unemployment in 2015, which will ultimately weaken the purchasing power of private households and thus private consumption. 

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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