Zurich, 25 November 2015 – The 0.04 point rise in the UBS Consumption Indicator in October stems from a slight improvement in consumer confidence and expected business activity in the retail sector. Despite consumers' gloomy labor market expectations, this was outweighed slightly by the prospect of an economic upturn. At the same time, business activity in the retail sector seems to have improved recently. Turnover in September rose slightly by 0.1% in real terms and adjusted for holidays, according to the Federal Statistical Office.

The index for business conditions in the retail trade, compiled by the KOF Swiss Economic Institute at the ETH Zurich, remains well below the long-term average. Although import prices have fallen considerably due to the strong franc, most expenses are incurred in local currency. Shopping tourism remains a source of concern for the retail sector. As shopping tourism shows up as imports, it is driving out a portion of domestic consumer spending, which accounts for more than half of Switzerland's GDP.

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 one to three months on the official figures. At more than 50%, private consumption is by far the most important component of Swiss GDP. UBS calculates this leading indicator from six 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, employment figures and credit card transactions made via UBS at points of sale in Switzerland. With the exception of the consumer sentiment index and employment figures, all of this data is available monthly.


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