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UBS Consumption Indicator continues upward trend
The consumption indicator calculated by UBS on a monthly basis rose for the third month running in January, sending out a signal that solid growth in real private consumption in Switzerland is set to continue.
The situation for consumer spending continues to look positive. After going from strength to strength in 2005, reaching 2.1% above the previous year's level in the third quarter, the UBS Consumption Indicator shows that growth sped up slightly for the months up to and including January. The trend barometer, compiled by UBS from five sub-indicators, climbed for the third time in succession in January, coming in at 1.46 points, from 1.33 in December. In order to make the UBS Consumption Indicator easier to understand, the values are now scaled in such a way that the overall time series are as close as possible to the growth rates of real private consumption.
This latest jump was fuelled by the marked rise in the consumer sentiment index in the first quarter, coupled with the enhanced business outlook in the retail sector. The latter is measured using the KOF/ETH business sentiment index for the retail trade; in the months before this data was unavailable and had to be replaced by estimates. There is presently no clear positive trend with regard to new car registrations, while the number of overnight hotel stays by domestic guests in Switzerland was relatively weak. The final factor used to calculate the UBS Consumption Indicator is the monthly volume of credit card transactions via UBS made at domestic points of sale.
UBS Consumption Indicator and private consumption in Switzerland
(Private consumption: year-on-year change in %, UBS Consumption Indicator: Index level)
Zurich / Basel, 28 February 2006