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UBS consumption indicator sent soaring by strong year-end in automobile trade and retail sector
Positive trend in new car registrations and better business conditions in the retail industry drove up UBS consumption indicator.
Zurich/Basel, 29 January 2014 – The UBS consumption indicator jumped to 1.81 index points in December from 1.40. Although the rise was apparent across all sub-indicators, the significant increase was chiefly due to the strong performance of new car registrations and high levels of confidence among retailers.
New car registrations rose by 9% in December on a seasonally adjusted basis. Although the 308,000 new cars registered in 2013 represented a 6% fall on 2012 levels, car dealers are satisfied with business in 2013. The reason for this is that at the start of the year they had feared a 10% drop following an exceptionally strong 2012. The picture is very different in the rest of Europe, where car sales in 2013 fell to their lowest level since 1995.
It has been a long time since we have seen so much optimism among retailers. The index for business conditions in the retail trade, constituting one of five sub-indicators in the UBS consumption indicator, rose to 12 index points in December from 4. This was the highest level since May 2011. Strong consumer demand more than offset the declining price trend in the retail sector, boosting nominal retail revenues by 3.3% in November compared with the previous year.
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.