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UBS Consumption Indicator: Signs of above-average growth in consumption
New car registrations on the increase, retail business activity declining
After stabilizing in October, the UBS Consumption Indicator fell again in November. The Indicator declined by 0.08 points to an index level of 1.63. The fall is primarily attributable to the deterioration of business activity in the traditionally volatile retail sector. The consumer sentiment index also fell. The increase in the number of new car registrations (November: +14.4% compared to the previous year) and the marginal year-on-year rise in overnight hotel stays by Swiss citizens were not able to compensate for these negative trends.
Despite the decline, the UBS Consumption Indicator is still above its long-term average of 1.50 points, which means that growth in consumption remains above average. Continuing strong immigration, low interest rates and declining unemployment should also bolster consumption next year. UBS Research Switzerland expects a robust consumption growth rate of 1.7% in 2011.
The UBS Consumption Indicator is calculated from five sub-indicators: new car registrations, business activity in the retail sector, the number of domestic overnight stays in hotels by Swiss residents, the consumer sentiment index, and credit card transactions via UBS at points of sale in Switzerland.
UBS Consumption Indicator and private consumption in Switzerland
(Private consumption: year-on-year change, in %; UBS Consumption Indicator: index level)
Carla Duss, Swiss Economic Research
Tel. +41 44 234 21 19
Sibille Duss, Swiss Economic Research
Tel. +41 44 235 69 54
UBS publications and forecasts for Switzerland: www.ubs.com/wmr-swiss-research