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UBS SME barometer: SMEs performed better than large companies

Zurich Media Switzerland

Between July and October, the SME barometer for industrials climbed from 0.64 to 0.75 points. The barometer for large industrial companies increased from 0.41 to 0.54 points. Both barometers are above their long-term averages, although the situation for service providers deteriorated slightly.

Zurich, 7 December 2017 – Most of the sub-indicators contributed to the rise in the barometer for small and medium-sized enterprises (SMEs) from 0.64 to 0.75 points in the third quarter. The rise in production level compared with the previous month was particularly strong, together with the expectation of higher production in the future. Only the poorer assessment of the order backlog and the lower level of orders month-on-month prevented even greater growth in the barometer.

Although the barometer rose more strongly among large companies, by 0.13 to 0.54 points, the picture for sub-indicators was less consistent. The sub-indicators "incoming orders compared to the previous year" and "order volume compared to the previous month" had a negative effect on the barometer for large companies.

On the other hand, the production level and the expectations of an increase in incoming orders in the next three months saw a rise. The higher production level also supported the barometer. Both barometers were above the long-term average in October and have improved markedly since the start of the year. Compared with the beginning of the year, the SME barometer was up 1.16 points in October and the barometer for large companies was 1.12 points higher.

Economic situation of service providers gloomier

In contrast to industrial firms, the economic situation of service providers appeared gloomier. In October, no significant differences were found between SMEs and large companies. Primarily a decline in demand drove this slight deterioration in business conditions. Although the assessment of the earnings situation at most companies still improved in the fourth quarter, this element fell marginally in comparison with the third quarter. Service providers are still expecting falling prices in the next three months. Large companies assessed price behavior more pessimistically than SMEs.

The situation among retailers eased in October. SMEs again rated business conditions as satisfactory, for the first time since mid-2014. Among large companies, the upward trend also continued. They again assessed conditions as good, for the first time since the exchange rate floor was abandoned. This upward trend among large companies is due to a better assessment of the earnings situation in the fourth quarter, among other factors. Among SMEs, however, the earnings situation continued to worsen. Although both large companies and SMEs expect falling prices in the next three months, light could be seen at the end of the tunnel for this sub-indicator.

Good business conditions for large companies in the tourism industry

Large companies in the tourism sector assessed their business situation as good in the fourth quarter, although with a decline in momentum. In contrast, SMEs still reported difficulty with the current economic situation. In their case, the quarter-on-quarter situation got worse in the fourth quarter. This downward trend among SMEs was driven by weaker demand and lower sales. With regard to the earnings situation, however, SMEs were able to maintain the level of the previous quarter, although at a low level. For large enterprises, on the other hand, all sub-indicators improved.

Construction industry SMEs still struggling with cost pressures

Companies in the construction sector still assessed their business situation as good, even though the momentum in this industry is expected to drop measurably in the fourth quarter. The business situation deteriorated due to a drop in earnings and a more pessimistic outlook on future price behavior. Large companies' order books also got thinner, while SMEs were able to stabilize them at the level of the prior quarter. Architectural and engineering firms, in contrast, foresee the economic situation in the fourth quarter as slightly improved.

UBS SME barometer

Sources: KOF, UBS

Calculation of the UBS SME barometer
The UBS Industrial Barometer is based on the industry survey conducted by the KOF each month (excluding the construction industry). It is calculated as the first main component of 17 subindicators for the entire industry, divided into SMEs (up to 200 employees) and large companies (more than 200 employees). It is scaled so that its mean value is zero and its variance is 1.


Sources: KOF, UBS


Sources: KOF, UBS

The data is seasonally adjusted. Survey responses are evaluated using a diffusion index: the result represents average of companies reporting a positive or a negative trend. It therefore does not represent a percentage rate of change.


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Media contact

Sibille Duss, UBS Chief Investment Office WM
Phone +41-44-235 69 54,

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