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UBS Consumption Indicator stabilizes in September
In September, the monthly consumption indicator calculated by UBS showed a slightly positive trend for the first time in five months. Private consumption should therefore continue to support the economy in the second half of the year.
At -0.80, the UBS Consumption Indicator showed a slight recovery over the -0.86 posted in August. This stabilization follows a five-month downward trend and can be taken as a sign of continuing growth in private consumption.
The UBS Consumption Indicator is based on five sub-indicators, which - with the exception of consumer sentiment - are available every month. While consumer sentiment was once again slightly negative, the number of newly registered automobiles and the monthly figures on overnight hotel stays by Swiss nationals in Switzerland both made positive contributions to the performance of the Consumption Indicator. There was a clear increase in new car sales in September and a marked recovery in overnight hotel stays in late summer, following quite a weak spring. Another sub-indicator included in the calculation is the business trend in the retail sector. Due to methodological adjustments, the latest monthly data for this sub-indicator are not yet available, so we have used our own estimates for this component. The fifth variable is UBS's internal record of monthly credit card transactions at domestic points of sale. The UBS Consumption Indicator, calculated using these components, is currently lagging a little behind its long-term average, but nonetheless clearly stabilized in September compared with its low set in February this year. Following the temporary weakness last winter, UBS economists therefore expect that private consumer spending will continue to lend support to the economy in the second half of the year.
UBS Consumption Indicator and private consumption in Switzerland
(Private consumption: year-on-year change in %, UBS Consumption Indicator: index level)