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Continued upward trend in April
The UBS consumption indicator rose from 1.20 to 1.41 points in April, primarily due to brightening consumer sentiment and improving figures in the retail sector.
Zurich/Basel, 29 May 2012 – The UBS consumption indicator continued its strong upward trend in April, rising to an index level of 1.41 points compared to 1.20 points in the previous month. The main factors behind this increase were a further rise in the number of new car registrations (+4.5 percent compared to the same month last year) and significantly brightening consumer sentiment. Business activity in the retail sector also showed positive figures in April for the first time since June 2011, which was another supporting factor for the indicator.
With 1.41 points, the consumption indicator has reached its highest level since June 2011, just slightly below its long-term average of 1.50 points. The consumption indicator is influenced by Swiss residents' overnight stays in hotels in Switzerland, credit card transactions and business activity in the retail sector, primarily measuring Swiss private consumption. Due to the strong franc, many Swiss residents currently spend their vacations abroad rather than in Switzerland and make more purchases abroad. This leads UBS economists to believe that the current index level is underestimating actual consumption in Switzerland.
This is also apparent in a study by the International Monetary Fund, which estimates the value of goods purchased from abroad in 2011, either directly or online, at 12 to 14 billion Swiss francs. Based on these figures, Swiss private consumption in 2011 would show growth of 1.6 percent instead of 0.9 percent.
Daniel Kalt, Chief Economist Switzerland
Tel. +41 44 234 25 60
Caesar Lack, Wealth Management Research
Tel. +41 44 234 44 13
Sibille Duss, Wealth Management Research
Tel. +41 44 235 69 54
UBS publications and forecasts for Switzerland: www.ubs.com/wmr-swiss-research