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UBS consumption indicator: sentiment worse than actual situation

Zurich/Basel | | Media Releases Switzerland


The UBS consumption indicator continued to recover in October following on from its weak showing in the summer. One of the factors for this was new car registration, which recovered in October after a weak previous month.

Zurich/Basel, 27 November 2012 – The UBS consumption indicator rose from 1.04 to 1.31 points in October. The increase was partly attributable to new car registrations, which experienced a recovery in October following very weak figures for September. The weaker business activity in the retail sector in October prevented the consumption indicator from rising more substantially.

New car registrations are subject to very strong seasonal fluctuations. When adjusted for these fluctuations, the data indicates that registrations slumped by about 15% in September. The rise of some 18% in October made up for this drop. Seasonally adjusted, around 27,000 new cars are now registered each month. Although this number is significantly higher than the long-term average of 24,000 new registrations, the trend is pointing slightly downwards. Registrations peaked in February at about 28,000 new cars per month. New car registrations are still high compared with the past. Although the new car registrations shore up the consumption indicator, the slight decline in the trend since February means that they are not expected to contribute further to growth in consumption. 

Two other sub-indicators in the UBS consumption indicator are far below their historical average, namely retail sales and consumer sentiment. In the retail sector, sentiment is subdued due to the drop in prices. Consumer sentiment is probably suffering from the string of bad news from outside Switzerland. Despite the poor sentiment, real retail revenue rose by a respectable 3.5% as an average for this year. The sentiment indicators are thus underestimating the actual development. UBS expects that private consumption will remain a key pillar of economic performance.

How the UBS Consumption Indicator is calculated
The UBS Consumption Indicator signals private consumption trends in Switzerland with a lead time of about three months on the official figures. At roughly 60%, private consumption is by far the most important component of Swiss GDP. UBS calculates this leading indicator from five consumer-related parameters: new car registrations, business activity in the retail sector, the number of domestic overnight hotel stays by Swiss residents, 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 this data is available monthly.


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Caesar Lack, UBS CIO Wealth Management Research
Tel. +41 44 234 44 13,

Sibille Duss, UBS CIO Wealth Management Research
Tel. +41-44-235 69 54,

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