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Slight increase in UBS Consumption Indicator in September

Zurich / Basel Media Releases Switzerland

The UBS Consumption Indicator rose again in September. At 1.88, it indicates a continued solid trend in Swiss private consumption.

The monthly UBS Consumption Indicator rose to 1.88 in September, compared with 1.72 in August and 1.89 in July. It thus remains clearly above the long-term average of 1.49.

The improvement in consumer sentiment contributed to the increase in the UBS Consumption Indicator, which is calculated on the basis of five sub-indicators. The indicator was also boosted by the KOF retail trade survey, which is showing a high level of activity. However, there was a clear slump in new car registrations: 19,407 new cars were sold, a drop of 8.7% compared with the same month last year. This decline must be seen in the context of the sharp increase in September 2005 following the flood in the previous month.

Overall, the UBS Consumption Indicator continues to give a thoroughly positive picture of the consumer climate in Switzerland. Private consumption is thus likely to have grown strongly again in the third quarter, supported by consumers' increased confidence in the future and the persistently positive trend on the job market. The clear drop in oil prices of late should also have a positive impact on consumption. UBS's economists expect real growth in private consumption to come to 1.9% overall in 2006 and 2.0% in 2007. As regards gross domestic product, they expect real growth of 3.0% this year and 1.5% next.

UBS Consumption Indicator and private consumption in Switzerland
(Private consumption: year-over-year change in %, UBS Consumption Indicator: index level)

Calculation of the UBS Consumption Indicator:

The UBS Consumption Indicator signals private consumption trends in Switzerland with a lead of about three months on the official figures. At 61%, private consumption is by far the most important component of Swiss GDP. The UBS economic barometer is calculated on the basis of five consumer-related indicators: new car sales, business conditions in the retail sector, the number of overnight hotel stays by Swiss nationals in Switzerland, the consumer sentiment index and credit card transactions made via UBS at points of sale in Switzerland. With the exception of the consumer sentiment index, all of these data are produced on a monthly basis.


Daniel Kalt

Head of Economic & Swiss Research

Tel. +41 44 234 25 60

Karin Schefer

Economic & Swiss Research

Tel. +41 44 234 43 94