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UBS SME barometer: Industrial companies pick up markedly

Zurich Media Releases Switzerland

Between January and April the barometer of small and medium-sized enterprises (SMEs) in the industrial sector climbed from -0.39 to 0.49 points. The figure rose from -0.56 to 0.51 points in the case of large industrial firms. Both barometers are above their long-term averages, and the economic situation for service providers also improved across a broad front.

Zurich, 8 June 2017 – The sharp 0.88-point rise in the SME barometer from January to April 2017, to 0.49 points, stemmed from all indicators. The climb in the production level and the general assessment of orders among SMEs contributed greatly in this respect. Among the large companies, all the indicators likewise led to the increase from -0.56 to 0.51 points. Incoming orders improved markedly compared to the previous year, as did the general assessment of the total backlog of orders and the non-Swiss backlog. The barometers of both business groups exceed the long-term average, with the latest figures the highest since mid-2011 for SMEs and a post-May 2014 peak for large companies. This enhanced outlook for industrial companies is also consistent with the assessments of UBS economists, who forecast more broadly based economic growth this year.

A glimmer of hope also for service providers

The business situation among service companies also continued to brighten. They, unlike large industrial companies last year and SMEs in the second quarter of this year, had never termed their business situation "poor" overall, but the share of service sector firms assessing their situation as such has shrunk continuously in recent months. The barometer improvement is striking among large service companies, while that of SMEs has been only marginal in the past few months. Their poorer assessment might be attributable to their subdued expectation for prices in the next three months. SMEs foresee a more significant drop in them than do large companies.
The earnings situation, however, recovered both for large firms and for SMEs in the second quarter relative to the first. Among large companies, this represents the first improvement since the euro exchange rate floor was abandoned at the start of 2015, and for SMEs since the third quarter of 2014. Demand for services also increased for both segments.

The business situation among retailers improved in each segment as well. The retail trade sector suffered greatly when the minimum exchange rate was lifted. While retailers now consider the business position satisfactory, only the proportion of SMEs describing the economic situation as "poor" declined. Overall, however, the business position was still termed "poor," a state also reflected in expected sales: SMEs anticipate a fall in them while large companies forecast a rise.

Large divergence among tourism firms

In the tourism sector, the two segments drifted further apart. While large firms assessed their business situation as "good" for the first time since last year's second quarter, SMEs not only lagged well behind this trend but sentiment deteriorated again recently due to the differing earnings situation, sales and demand.

In the construction industry, the business situation of SMEs has stabilized in recent months while, among the large firms, it grew considerably better again. The improvement could be attributable to the rise in orders, the first among this segment since the third quarter of 2015. But profits remain poor and companies expected prices to fall further. The situation is gloomier among SMEs. Order levels and profits alike shrank in the second quarter compared to the first. The surveyed SMEs also see prices continuing to decline in the next three months.

UBS SME barometer

UBS SME barometer

Calculation of the UBS SME barometer
The UBS Industrial Barometer is based on the industry survey conducted by the KOF each month (excluding the construction industry). It is calculated as the first main component of 17 subindicators for the entire industry, divided into SMEs (up to 200 employees) and large companies (more than 200 employees). It is scaled so that its mean value is zero and its variance is 1.


SME barometer - industry


SME barometer - services

The data is seasonally adjusted. Survey responses are evaluated using a diffusion index: the result represents average of companies reporting a positive or a negative trend. It therefore does not represent a percentage rate of change.


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Media contact

Sibille Duss, UBS Chief Investment Office WM
Phone +41-44-235 69 54,