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Activity in Swiss industrial sector peaks

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The cyclical upswing in the Swiss industrial sector has reached its peak. The latest UBS business survey points to a moderate slowdown in growth in the first quarter of 2005.

UBS outlook update 1st quarter 2005

According to the latest UBS survey carried out in January, the Swiss industrial sector has begun to cool off slightly after following a strong growth path in 2004. This quarterly survey of business trends at around 300 industrial companies, which has been conducted since 1975 and anticipates the official data by two quarters, provides an indication of short-term trends in the Swiss economy. The UBS business cycle indicator, a trend barometer for GDP based on the actual results of the survey, signals further strong growth in the fourth quarter of 2004 and a slower growth rate of 1.8% for the first quarter of the new year.

Slacker demand from abroad

Although Swiss industry continued to enjoy a very strong business performance in the fourth quarter, there was a slight slowdown in the growth of orders from abroad. Sales, earnings and production were also down somewhat compared with the previous quarter, but remained clearly positive. For example, 54% of all survey participants reported increased sales, while just 22% of firms registered a decline. With the exception of electrical engineering, chemicals & pharmaceuticals and timber & furniture, all sectors of the economy experienced slightly slower business growth in the final few months of 2004. Bringing up the rear on a cross-sector comparison were the plastics, textiles and paper industries, with the latter the only sector to record an actual downturn in the trend of business compared with the previous year. The chemical/pharmaceutical industry, meanwhile, maintained its position as the growth leader, ahead of the metal industry.

Shift towards the domestic economy

The companies surveyed by UBS anticipate almost no change to the present dynamic business trend in the first quarter of 2005. Strikingly, the growth drivers are shifting towards those industrial sectors with a stronger domestic bias. While export sectors such as machinery, electrical engineering and chemicals & pharmaceuticals are expecting to see a marked slowdown in growth, the food, timber & furniture and paper, printing & graphics industries are all hoping for a major acceleration in the pace of business.

Zurich, Basel, February 7, 2005, 08.00 a.m.


Dr. Daniel Kalt, Head of Swiss Economic Research

Tel. +41 1 234 25 60

Karin Schefer, Swiss Economic Research

Tel. +41 1 234 43 94

UBS publications and forecasts for Switzerland:

UBS Business Cycle Indicator and gross domestic product
Change year-on-year in %

Data (in %)